Study Gives LTC Brokers Some Facts Their Clients Need To Know
A recent study by CNA Group Benefits outlines the average cost in 2000 of room and board at nursing care facilities across the country as well as ancillary services not always covered by long-term care policies.
Both pieces of information are useful to brokers, says Cheryl McNamara, vice president, product management, group long-term care, of the Chicago-based company.
“It helps someone figure out how much insurance they should buy,” she says. “Some people want to retire in a different location; the study will show them if the average cost in those areas looks like the cost in their area and the broker can advise them that way.”
McNamara says the discussion of ancillary services should be a reminder to brokers to guard against creating false expectations in the buyer by having a clear understanding of the contract language.
A broker can take the study to an insurer to find out exactly which ancillary services are covered under a policy, McNamara says.
Policies often include wording about covering “reasonable charges,” according to McNamara. But she adds that a broker should not assume this means it will pay for ancillary charges.
“If it says it will pay the reasonable charges, you just dont know,” she says. “Some companies will [pay ancillary charges], some will not. The broker can take the study, show it to the insurer and ask, Which do you pay?”
The more skill needed in performing the service, the more likely it is to be covered, McNamara says.
“Most plans cover things like dressing supplies, wound care,” McNamara explains. “The less skilled the service, particularly for things like grooming, the less likely it will be covered.”
McNamara cites a stay at an assisted living facility attached to a nursing home as an ancillary charge that may or may not be covered by different policies.
“Additional services that patients frequently require and are not included in the daily room charge include therapies, tube feedings, durable medical equipment, hair care and telephones,” according to a synopsis of the study. “Patients are billed separately (from the basic room charge) for prescription drugs by 89% of facilities.”
The study also finds that the number of nursing home facilities is declining–a statistic that can be particularly helpful to brokers faced with clients hesitant to buy coverage they feel they may never need.
Nursing home facilities are “not a high-profit operation, so its hard to find investors,” McNamara says. She also points to pressure to reduce costs from Medicare and Medicaid as a reason for their dwindling numbers.
Because there are fewer nursing homes that are funded by the federal government, “private funding may play an increasingly important role in patient care options,” according to the synopsis.
In fact, increasing numbers of nursing homes are converting to specialized facilities, a stay in which is often covered by LTC insurance, says McNamara.
“Some are converting to “ancillary facilities like assisted living, some only serve HIV patients or dementia patients,” she says. “The specialty operations are growing.”
Reproduced from National Underwriter Life & Health/Financial Services Edition, August 27, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.