Joe Sperling, J.D. on Insurance – Not your Ordinary Joe View All Posts

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Long-Term Care from A to Z – Part 11

IdeasIf by now you are a little concerned that you may not qualify for LTC insurance because of age or medical history. I’m sorry.  It is just the reality of the LTC marketplace.  But don’t despair (at least not yet). There are some alternatives. What you can do if you can’t get LTC insurance:  

One possible solution is to purchase a “Home Care Service Plan.” This plan is not insurance, so there is no age limit and no medical underwriting. A person seeking membership in the plan is guaranteed acceptance. The membership cost is not based on age or gender, but simply on how many days or hours per year you want home care services.  There are no claim forms and no proof of disability is required. This plan is not for nursing home care. But since most folks want to be at home for as long as possible, membership can offer peace of mind that care will be provided and family will not be burdened.  Care services are available from licensed caregiver agencies, or, if the member prefers, from a friend or neighbor, and the plan pays the caregiver for the number of days or hours specified by the member when the application was submitted.

Another possible solution would be to purchase an annuity that can provide for lifetime monthly benefits, so that there will always be a monthly payment to the annuitant for the rest of the person’s life. Annuities do not require medical underwriting. The payout could be used to offset the cost of future care.

Speaking of annuities, a very specific type can be used to assist in qualifying for Medicaid. Medicaid eligibility is based on income and assets (countable resources). Transferring assets into a Medicaid compliant single premium immediate annuity with very specific provisions will remove the assets from the person’s countable estate, and avoid the look-back for those assets, while providing a stream of income for the community spouse (the one not in a nursing home). Medicaid compliant annuities require very specific provisions. If you wish to consider purchasing one, be certain to use an insurance broker and elder-law attorney who are familiar with the requirements.

This is a good place to cover Medicaid. If LTC insurance is unavailable, for whatever reason, the ultimate safety net of Medicaid will (hopefully) still be there. For those that don’t know, Medicaid is a joint federal and state program intended to fund care for lower income residents and those with disabilities. There are currently nearly 60 million Americans with their doctor and hospital visits, as well as some long term care benefits, covered by the Medicaid program.

The high cost of LTC services may prompt some people to try to qualify for Medicaid as soon as possible by “spending down” their assets to meet the state guidelines. It cannot be emphasized enough that if this is a consideration, it is imperative to consult with an attorney who specializes in elder law and has expertise in Medicaid qualification. Without proper guidance, the applicant for Medicaid may run afoul of the look-back rule and become subject to disqualification, delay of eligibility and/or a penalty period.

Applicants for Medicaid should also keep in mind that federal law requires states to seek recovery from a beneficiary’s estate (all real and personal property owned by the individual) after their death for the amount spent by Medicaid for the individual’s care.

Hopefully it is very clear that this is an area requiring expert guidance, and not a good place to be a “do-it-yourselfer”.


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Joe Sperling

About Joe Sperling

I am a native of Montgomery County and still live here. Attended Montgomery Blair, Maryland University and Georgetown Law Center. Blessed with two beautiful and accomplished daughters (one a physical therapist and one a registered nurse) and two grandchildren (with one more in the oven), as well as a gorgeous and energetic wife of 45 years (and counting). Hobbies include golf and motorcycling.   I have been accused of being a frustrated teacher, and I wear that as a badge of honor. I welcome questions and comments. I also encourage visits to my website for additional information and to make me feel good.


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