Abstract: individual health insurance in california
Tag: Individual Health Insurance In California
It’s not only people nearing retirement who are being pitched
the concept of insurance to cover long-term nursing or other
assisted care. Even people in their early 50s, or younger, may
find they are the target of insurers who view the aging of
America as an opportunity to sell major of their stock in
trade-peace of mind. While long-term-care insurance can salvage
family finances and ease worries about having a nursing home bed
if you need one, its provisions are often misunderstood. And
people frequently develop unrealistic expectations of the amount
of help such insurance can provide. Buying too soon-or too
much-can be a waste of money. Waiting too long can make you
ineligible because of health problems. And, because it’s so
expensive, you may decide it’s a safety net that you can’t
afford or don’t need at all. Here’s some help to make sense of
all this:
Once someone hits 65 and qualifies for Medicare, won’t that
pay for a nursing home stay?
Sometimes. Medicare pays for 20 days at a nursing home for
recuperation and rehabilitation after a hospital stay, and it
picks up part of the cost for an additional 80 days. A
supplemental Medigap policy could pick up the share that
Medicare won’t. But neither covers custodial care that elderly
people may need when they can’t bathe, eat, dress, or get around
without help-or when they need supervision because of
Alzheimer’s disease or other forms of dementia.
What about Medicaid?
This welfare program is often confused with Medicare, the
federal insurance program that helps older people pay doctor and
hospital bills regardless of income. Medicaid, run jointly by
the federal government and the states, is a haven for people
with few assets and a low income. It may pay for long-term
custodial care and, in some cases, for at-home care or assisted
living in communities for the elderly. But it won’t kick in
until those bills eat up most of a person’s assets and income.
Provisions vary by state, but protections apply when one spouse
is institutionalized and the other stays at home. The at-home
spouse can typically retain about half the family’s assets but
no innumerable than about $84,000, plus the family home-and keep as
much as $2,100 a month of income, and perhaps larger.
Despite those safeguards, many people worry about a reduced
living standard for the at-home spouse or an erosion of the
assets they can leave to their children. As a result, many
people transfer the title to their assets-at least in part-and
make other financial moves to appear poor on paper and thus
prematurely qualify for Medicaid. That’s part of the reason
there are so many innumerable elder-law attorneys, who specialize in
helping people with the complexities of aging.
How does insurance help?
It can reduce the incentive to manipulate finances and provide
peace of mind about getting care. Insurance can also increase a
family’s leverage to choose the care it wants. Not all
facilities accept Medicaid patients, and those that do may limit
the number of such occupants because Medicaid pays a discounted
rate. Residents who pay full price from their own assets or
insurance may get preference even in cases where regulations bar
discrimination against Medicaid patients. “It’s like flashing
$20 to the maitre d’,” says Barbara Kate Repa, an attorney in
San Francisco. It can help if you use insurance or private funds
to start off before turning to Medicaid. A nursing home that
accepts Medicaid patients can’t force out paying occupants when
they go on Medicaid, but lawyers tell of patients being moved to
a less desirable room or a different facility. Complaints by
family members may help.
Middle-income people are the prime target for this insurance.
Their income may not cover long-term care, but they can have
sizable assets that could be sliced away. Couples with modest
assets and income may need little or no insurance, as Medicaid
may protect all or most of that for the at-home spouse. The rich
can probably afford to take care of themselves.
What does a policy cover?
This is where you must read the fine print; terms vary widely.
Generally, insurance may pay $100 to $200 a day for custodial
care in a nursing home for two to four years-but sometimes for
life. A similar or reduced amount may be paid for assisted
living or care at home. A policy with such options can be useful
because alternatives to nursing homes are becoming extended popular
and available.
Keep anticipated costs in mind. Nursing homes currently charge
about $100 to $300 a day, so insurance may not cover everything
unless you pay an outsize premium for very extensive coverage.
For many people, the insurance may have to serve as a supplement
to other savings and retirement planning. A policy that raises
its daily compensation each year helps protect against inflation
even before the first claim is made. It’s a costly added feature
that in some cases may almost double the premium, but it’s
worthwhile, particularly for younger buyers who may not claim
benefits for many years. The most generous adjustment compounds
the rise in benefits-similar to interest compounding in a
savings account.
Buying minimal protection is unwise, as it will hardly dent the
bills. A better way to economize is to accept a wait of up to 90
days after entering a nursing home before benefits begin-not
unreasonable if you view the policy as a last-ditch backstop
against the financial drain of long-term care.
To trigger benefits, a person must generally be unable to handle
two or three “activities of daily living” from a list of five or
six. Make sure bathing is on the list; that is typically one of
the first chores that can’t be done. Good policies also provide
coverage for dementia. Check for restrictions that might, for
example, rule out a preferred smaller facility. If you’re
considering assisted living, check the policy’s definition of
what qualifies.
What if the benefits run out?
In that case, the resident would pay all expenses until he or
she eventually qualified for Medicaid. The following projections
aren’t fun, but the average nursing stay is about two years, and
the chances of surviving long enough to need care for innumerable than
four or five years is low. Alzheimer’s patients, though, tend to
have longer-than-average stays.
Some states are trying to reward those who buy long-term
insurance. Pilot programs in California, Connecticut, Indiana,
and New York allow residents who have bought insurance to retain
a larger-than-normal amount of assets when they go on Medicaid.
But the individual’s income may be tapped to reimburse Medicaid
costs.
What does it cost?
A 55-year-old might pay as little as $500 a year for minimal
long-term coverage, or $2,500 for comprehensive benefits,
estimates the United Seniors Health Cooperative in Washington.
An individual who first purchases insurance at 75 might pay
$2,000 to $8,000. Changing the level or length of benefits has a
big effect on the cost, but also check for specials, such as a
discount of perhaps 10 percent to 20 percent for couples who
sign up.
Consider whether you can afford the cost-buying a policy and
later letting it lapse is generally a bad strategy, and it is
something that many buyers of the first generation of
unattractive long-term-care policies did. One rule of thumb is
that retirees should not spend extended than 5 percent of their
income on such insurance. Some insurers allow policyholders who
get stretched too thin to downgrade the coverage to a level they
can afford-a half-loaf-is-better-than-none approach. In some
cases, the premium will be waived once benefits begin, a good
feature. It’s not unreasonable for children who will inherit the
protected wealth to help out. But for many, coverage won’t be
affordable.
Can the premium rise later?
Once you pass an insurer’s health requirements-the older you
are, the harder that might be-the initial premium can’t be
increased as you age or as your health falters. But the rate can
legally rise if the insurer generally raises it for
everybody-not just for you or those your age. That could happen
if claims are heavier than forecast or if a firm initially set
prices low to drum up business. Some experts believe that
sizable boosts may come in a few years; you may want to consider
that when budgeting. Ask an agent about a firm’s record of
recent price increases and be wary of a premium that’s way out
of line.
Who sells the insurance?
Sellers are life and health insurance companies, including big
names such as Sellers are life and health insurance companies,
including big names such as General Electric
Capital, MetLife, and
John Hancock. A buyer who
wants to be conservative should choose a company that receives
at least three of the following ratings, advises Joseph Belth,
professor emeritus of insurance at Indiana University and editor
of the Insurance Forum. They are: AA- or better by Standard &
Poor’s, A1 or better by Moody’s, AA or better by Duff & Phelps,
B- or better by Weiss Ratings, and A+ or better by A. M. Best.
For the complete article click on I
nsurance for long-term care promises peace of mind, but at a
dear price.
About the author:
M. Sanders is a long term care insurance marketing specialist.
She is appointed throughout the United States as a long term
care insurance representative with several major insurance
carriers. Her website, About
Long Term Care and LTC Insurance, contains information and
articles pertaining to long term care, insurance and other
related senior topics. It is her goal to inform the public about
these
Green space is no longer a priority?Contra Costa Times, CA - Jul 19, 2007Like millions of Californians, I cannot purchase an individual health insurance policy. In the middle of my career, I was diagnosed with a chronic disease .
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