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January 31, 2006 at 07:00 PM
Long term care insurance is a challenging sale, despite the high likelihood that people will need it before they will need homeowner’s insurance or car insurance. Potential loss of health and well-being doesn’t resonate like potentially losing a home, but the former can be much more damaging than the latter.
Too many potential clients don’t look at LTCI until they are older and the coverage is more expensive. And even then the sale can be anything but a slam dunk. Objections pop up like a steel-headed whack-a-mole, daring you to do your best to knock them down. We asked two LTCI specialists to tell us how they overcome two of the most popular objections: “Medicare will pay for my expenses,” and “I’ve got plenty of money to finance my own long term care.”
Medicare will pay for my expenses.
By Rhonda Vry-Bills
A lot of my clients thought Medicare would cover their long term care expenses. It is important for individuals to understand that Medicare is a federal health care program that is designed to cover hospital and doctor expenses after an individual turns 65. Since the beginning of Medicare, the program has expanded its benefits to include individuals under 65 for disability reasons. The primary purpose of the Medicare program is to give hospitalization and outpatient medical coverage when individuals are no longer working. Medicare did not make provisions for long term care (greater than 100 days of care) expenses.
Medicare, however, did make provisions to cover skilled rehab services. It is wonderful at paying the hospital expenses for individuals and also will pay for expenses if an individual needs to go to a skilled nursing facility for rehabilitation purposes. To qualify for this, an individual must meet the following three requirements:
1. He must spend three nights in the hospital.
2. He must go to skilled nursing after the hospital stay.
3. The facility must be Medicare approved.
Individuals who have hip, knee or shoulder replacement surgeries have a need for assistance and supervision, or individuals who suffer from a stroke may need physical, occupational or speech therapy in a skilled nursing facility. Medicare will cover 100 percent of expenses for the first 20 days in that SNF. At day 21, Medicare co-shares the cost for the next 80 days with a standard Medicare supplement.
On day 101, if the patient still needs skilled care, Medicare will no longer pay for any of these services. It is important to understand that Medicare will pay for these rehab services only as long as the individual is categorized as needing “skilled care.” The definition of skilled care implies that the individual is making progress in his recovery and is expected to return to a self-sufficient lifestyle.
The reality is a vast majority of long term care claims are not paid for skilled care, rather for “acute (chronic, ongoing) care and assisted living.” Thus, if the individual is not categorized as needing skilled care per his physician, but he has reached a plateau where he is no longer benefiting or making progress from the therapy services, the doctor categorizes the individual as needing acute care. Medicare is not designed to cover ongoing care for the remainder of the individual’s life, so it will not cover any of the acute care expenses.
As we age, we are at risk of living longer, which presents the risk of needing assistance or supervision on a daily basis. For example, today, individuals can bathe on their own without putting a lot of thought into the logistics. As we age, however, we consciously stop and think about how to get in and out of the shower without slipping and falling, thus causing a need for assistance or supervision. Again, Medicare would not cover any of these expenses, because this is not skilled care, but rather an ongoing need for assistance or supervision due to the aging process.
