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Consumer Advisory: November 4 - 10 is Long Term Care Awareness Week ~ Now is the time to plan for your future care needs ~
November 5, 2007 701-328-2440

Bismarck, ND - It is Long Term Care Awareness Week and Insurance Commissioner Adam Hamm today reminded seniors across North Dakota that with healthcare costs rising and longer life expectancies, funding long-term care needs is an increasing concern for many. 

"Consumers who would like to protect their assets, minimize dependence on family members and control how they receive nursing or home care, should carefully consider long-term care insurance," said Hamm. "It's a highly individualized decision that requires people to look closely at multiple factors including their family health history, dependent relationships and personal financial situation."

According to the U.S. Department of Health and Human Services (HHS), about 9 million Americans, now 65 or older, will require long-term care. HHS expects that number to rise by 25 percent - to 12 million - by 2020. 

Understanding the Basics of Long-Term Care Insurance

When people are unable to perform activities of daily living - such as eating, dressing and bathing - long-term care insurance can pay for the services of nursing homes, assisted-living facilities and in-home caregivers. Importantly, long-term care insurance covers expenses for those diagnosed with a chronic illness such as Alzheimer's disease, Parkinson's disease, multiple sclerosis and diabetes. 

Standard health insurance policies and Medicare usually do not pay for long-term care expenses associated with these illnesses. Medicaid provides limited long-term care benefits - and only after a person's assets have been depleted.

A major consideration for purchasing long-term care insurance, according to Hamm is whether individuals have assets they want to protect, as the substantial annual cost of long-term care can quickly deplete even a sizeable nest egg. On the other hand, if one's retirement savings are minimal or non-existent, he or she would likely qualify for Medicaid in a very short period of time, significantly diminishing the need for long-term care insurance coverage. Consumers should not purchase long-term care insurance if they are currently on Medicaid or their only source of income is Social Security.

Hamm said that a new program, the Long Term Care Partnership Program, allows Medicaid applicants who have purchased a qualifying long term care policy access to Medicaid benefits while retaining assets that they would normally be required to spend on care. Currently, seven insurance companies selling in North Dakota have been certified as offering qualified Partnership plans.

"The Partnership program will be of great benefit to people who need to retain assets for their continued living expenses," Hamm explained.

For more information regarding the Long Term Care Partnership Program, please contact the North Dakota Insurance Department at 1.800.247.0560 or visit our website at Long Term Care Partnership Information 

Seven Special Considerations Regarding Long-Term Care Insurance

  1. Investigate long-term care coverage if you don't want to rely on others to support you, and you want flexibility in choosing the type of long-term care services. 
  2. Long-term care insurance isn't for everyone. If you are currently receiving Social Security or expect to have minimal or no retirement savings, you will likely qualify for state aid and should not purchase long-term care insurance. However, if you are financially secure, don't rely on Medicare or Medicaid to cover your long-term care needs. Medicare will usually pay for a small percentage of nursing home costs. Medicaid pays for long-term care services but only if you meet federal poverty guidelines and the choice of care facilities can be very limited. 
  3. Check with the North Dakota Insurance Department to learn how rate increases are regulated. Ask questions and make sure the company is reputable and licensed to sell insurance in North Dakota. 
  4. Make sure you understand what a long-term care insurance policy covers and just as importantly, what it doesn't cover. An "outline of coverage" that clearly describes the policy's benefits, terms and limitations in detail should be requested. It is important to understand how much money the policy would pay, and how much the policyholder would be responsible for out-of-pocket.
  5. Be abreast as to long term care language. An elimination period is a set number of days that must be spent in a nursing home or in claims status before the long-term care insurance coverage kicks in. An inflation protection option that periodically increases the benefit level may also be a considering factor in purchasing long-term care insurance. 
  6. The long term care recipient has the right to cancel the policy for any reason within 30 days of purchase and receive a full premium refund. A guarantee that the policy cannot be canceled or terminated because of the policyholder's age or physical or mental health condition is also active. 
  7. Pre-existing conditions, conditions that you have before you apply for the insurance coverage, may be excluded from coverage. In addition, it may be beneficial to purchase your policy before your late 50's.

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North Dakota Insurance Department
600 E. Boulevard Ave.
Bismarck, ND 58505-0320
Phone 701.328.2440
Toll free 800.247.0560
Fax 701.328.4880

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