The Types of Long Term Care Facilities and Why It Matters – Part 2

In my blog post last week I addressed the differences between types of facilities and the confusion I see when someone tells me the type of facility they are looking at for a loved one – or they think they are looking at.

This matters, for example, when someone has a long term care insurance (LTCI) policy.  I am often told that Mom or Dad has an LTCI policy, followed by the question “that will cover the cost of care, right?”  There isn’t a one size fits all answer to this question.  Maybe yes, maybe no.  It depends on what the policy says.  In other words, what type of coverage did they buy?

LTCI may cover care at home, in an assisted living facility (ALF) or in a nursing home (NH).  It may cover one, two or all three of these.  The more it covers the higher the premium.  More coverage may have originally been purchased and then reduced when a policyholder was faced with an increase in premium.  The amount of coverage – as defined in terms of a maximum daily rate and a length of years at that maximum rate – may be different for each type of care.  For example, the home care maximum daily rate may be 50% or 75% of the max rate for ALF and/or NH care.  It also might be the same for all of them.

Then there is the policy language.  How is an ALF defined?  Does the policy pay for home aides only at home or in a facility?  Understanding the parameters of your LTCI policy is important when choosing a facility if you expect to count on the policy to pay or help pay for that care.  Saying it another way, you must know the type of facility you are choosing to be sure it fits within the LTCI policy definitions.

Knowing the type of facility you are choosing is also important when considering the possibility of needing other third party sources such as Medicaid.  I’ll cover that next week.