One of our friends was in a nice assisted living facility shortly before she passed. We were told by their staff that depending on what type of LTCI a person has it may only cover rent, and food but not medical care. Is that true, and if so what questions do we need to ask our insurance agent about this before purchasing a policy?

Hi Nancy – the room and board is the bulk of the charge in an assisted living facility and it can vary by how much care a person needs. For example, it is common for the cost for an Alzheimer’s patient who requires constant care to be higher than someone who needs help with bathing and dressing every day. An Alzheimer’s patient could cost $4500 a month, for example, vs. $3500 a month for someone who needs help with two activities of daily living (ADLs).  Providing help with ADLs, medication management and supervisory services for cognitively impaired patients are all covered expenses by long-term care insurance. Medical care like doctor visits/hospital stays are eligible expenses under Medicare, Medicare supplement, Medicare Advantage or whatever health insurance the person has. Physical therapy, speech therapy and the like can be covered by long-term care insurance, depending on how it is billed.

Now, if you want to hire caregivers to stay with you in an assisted living facility, that will come out of your pocket. If you want it to be covered by long-term care insurance, buy an all-cash policy so you can spend the monthly benefit however you need it. MedAmerica (subsidiary of the Blue Cross plan in Rochester, NY) is the main one available now. The product is called Simplicity. Prudential allows you to take up to 60% of your monthly benefit in cash so if you buy a large enough monthly benefit, you can make that work. Both companies sell their products through brokers so your insurance agent can get them for you. The next best thing is an indemnity policy that gives you the daily or monthly benefit regardless of the charge. That way you can use the difference between your benefit and the charge for room and board and pay for caregivers.


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