Answers to the LTC IQ Test

Q: What do skilled nursing facilities (i.e. nursing homes) cost in the Buffalo - Rochester - Syracuse, NY region? A. $104,492 per year.  According to a survey conducted by Genworth Financial, the daily rates for a private room range from a low of $235 and a high of $362 in this region (source:  Genworth Financial, Cost of Care survey, 3/31/2007).   View Rochester's facility breakdown View NYS Partnership statewide map Q: NYS Partnership policies are often called the best value in LTC insurance, by why aren't they for everyone? Not everyone can afford insurance in the first place. For those who can, Partnership plans are basic coverage that includes reimbursement (vs indemnity or cash plans), policyholders must return to NYS for Medicaid Extended Coverage, and policyholders may not have control over what facility they'll be in. Q: A NYS Partnership policy differs from regular LTC insurance in several ways.  The main difference is ________? A. With a partnership policy you buy a limited amount of coverage but receive a lifetime of protection because of the Medicaid Extended Coverage provision, while part or all of your assets escape Medicaid's spend-down requirement. Q: Most long-term care is given by "informal" caregivers.  What is informal care, and who is it usually provided by? A. Informal is the name given to all non-paid care typically given by non-trained personnel.  Though it can be given by anyone, families are the most common providers of informal care.   Children are the largest group at 40%, with grandchildren second at 15%.  Only 5% of informal caregivers are spouses (most recipients of care are women, many of whom have lost their husbands).  (Source: National Alliance for Caregiving & AARP, Family Caregiving in the US., 2003). Q: The family relationship that most frequently deteriorates in a long-term care experience is between _________?    Why, usually? A. Sibling relationships tend to be especially difficult when a parent needs care, because the responsibilities are often not shared equally. Q: One impairment is more often responsible for the decision to end informal care than any other. What is it? A. Incontinence. Q: Home-care aids can be either  Medicare certified, or licensed (but not certified).  What are the average costs of each in our region? A. Licensed (but not certified) aids ranged from $17.75 to $22.00 per hour (average $19.88).  Medicare certified aids ranged from $18.75 to $50.00 per hour (average $28.29).  The cost of staying at home with paid care depends on which of the two you need, and on how many hours per day the caregiver must be there.  Do the math and you'll see that paid home care can quickly become more expensive even than a nursing home (Source same as above). Q: Patients in an assisted living facility today can resemble those who used to be in nursing homes years ago.  The reason is cost:  What's the average cost of a one-bedroom unit in an assisted living facility in the Rochester, NY region? A. Monthly rates on private one-bedroom units were a low of $1990, a high of $5370, and an average of $2967 ($35,607 per year) in 2007 (source:  The same Genworth study as above). Q:   NYS Partnership policies are said to protect assets from the Medicaid spend down requirement.  Is income similarly protected? A. No.  Income, such as Social Security payments, pension payments or annuity income is generally seen as available for nursing home costs, subject to the income allowance for the non-institutionalized, or "community" spouse of married patients. Q:  Aside from cost, what's one big difference between a paid professional caregiver and a caregiver who's a member of the family? A. Patients who may take instructions from paid health aides often rebel against taking the same instructions from family members. True or False?  Transferring financial assets to your family or loved ones would allow you to qualify immediately for Medicaid Payment for long-term care? A. False.  Transferring assets within the "lookback period" creates a transfer penalty, or period of ineligibility for Medicaid payments. Always consult your advisor or elder-law attorney before taking any planning steps, including transferring assets to your family or others if long-term care is anticipated.   True of False?  Most long-term care occurs in nursing homes? A. False.  Most care is received in the home; either from informal caregivers, or from paid home health aids.  The goal of LTC planning is always to try to keep the patient in his or her own home environment whenever possible.  LTC insurance can often delay or even prevent the need for nursing home care.   True or False?  NY Partnership insurance pays only for care received in a nursing home? A. False.  Partnership policies include both a facility and a home care provision.   True of False?  NYS Partnership policies only pay for care received within New York State? A. False.  Policies pay for care outside of New York State (policy provisions apply), but presently the insured must return to New York in order to realize the Medicaid Extended Care benefit.   True of False?  If you can go to claim on your LTC coverage, it's generally best to use your savings to pay for care first, keeping the insurance in reserve? A. False.  This is a common mistake made by policyholders, who may have learned from other insurances that making a claim is punished by an increase in rates. Some reasons to use your benefit as soon as you can might include: 1) Your coverage may have a waiver of premium feature that means you may not have to make payments while receiving benefits; 2) One of the reasons for buying the insurance in the first place was to preserve those savings; and 3) Of those entering a nursing home, 92% are no longer living just three years later. Be sure to discuss your decision with your family, and seek the advice of a qualified advisor who's familiar with your case.   True or False?  Medicare will pay for my long-term care if I cannot afford to pay? A. False.   In fact, Medicare, which is often thought to cover substantial long-term care costs, pays for only a limited time, and then only in conjunction with a hospital stay for an acute condition, and then only while the patient is improving (rehabilitative).  Medicare does not pay for custodial care made necessary by chronic medical conditions. True of False?  If I'm in good health, I can save money by postponing the purchase of LTC insurance and buying it later on?  A. False.   Even if your health remains the same, the cost of your coverage is a factor of your age when you buy the protection.  What's more, the daily benefit amount you'll need today will have to be adjusted to a higher number later to reflect actual increases in costs.  Plus, an adverse health development can rule out a good-health discount, or even make you ineligible for coverage at all.  Ask your agent for a projection showing the cost of waiting vs buying now. True or False?  My health insurance premiums keep going up each year, and so long-term care insurance premiums on a policy I already own must also continue to increase? A. False.   Unlike most health insurances, the benefit, or maximum benefit of a long-term care insurance policy is usually expressed as a dollar amount, rather than as a level of care.  Insurance companies are able to calculate a fixed premium payment sufficient to fund a known dollar stream in the future, even if that stream includes inflation protection.  What they're NOT guaranteeing is whether or not that dollar amount will be enough to cover the cost of your care when you need it. Carriers may ask regulators for an increase in premiums on existing policies, but they can't increase your premium without raising all premiums for others who have the same type of policy.  Ask your agent for the rate increase history of the carrier you're considering for details.    True of False?  More NYS Partnership insurance policies have been sold in Monroe County than in any other county of the state? A. True.   According to the NYS Partnership website, Monroe county residents have bought nearly 50% more policies than the #2 county.  The explanation for that might be because two major employers in Rochester allow their retirees to take their pensions in lump sums.  Partnership policies in NYS have the feature of protecting assets; but not income (such as pension payments) from the Medicaid process. True or False?  Most people who purchase long-term care coverage on themselves report having experienced a long-term care event by someone close to them before buying? A. True. In fact,  94% of them do.  Seeing parents or other loved-ones go through this process is the best long-term care insurance salesman of all.  Children in their fifties and sixties learn that  LTC protection on them isn't for them:  It's a gift to their children and families.