When you grow older or suffer from a debilitating injury or illness, you may need more than medical care. You may also require assistance with your basic activities of daily living. Unfortunately, this support can be highly expensive. Most health insurance plans, including Medicare, will not cover costs. For this reason, many people in New York turn to long-term care insurance.
To learn more about long-term care insurance and how it could help you afford the care you need without sacrificing your hard-earned assets and resources, contact Amoruso & Amoruso LLP today. With nearly six decades of combined legal experience, you can count on our New York estate planning attorneys to develop a customized, holistic estate plan to prepare and protect you and your loved ones for whatever the future holds.
What is Long-Term Care Insurance?
Many people require long-term care at some point in life. It is the type of care a person needs when they can no longer care for themselves due to the effects of aging, illness, or injury. Typically, it involves assistance with carrying out activities of daily living (ADLs) like:
- Bathing and general hygiene
- Dressing
- Preparing and/or eating meals
- Toileting
- Moving from one place to another
This care may be provided in a wide range of settings, including:
- Your own home
- Nursing homes
- Adult day care centers
- Assisted living facilities (ALF)
- Continuing care retirement communities (CCRC)
- Respite care facilities
- Hospice care facilities
For many individuals and families, long-term care costs can be overwhelming. For instance, the cost of nursing home care in Westchester County, NY, is roughly $124,000 per year, according to the New York State Department of Financial Services.
How do you pay for long-term care? Generally, private health insurance plans will not cover it, nor will Medicare or a Medicare supplement insurance plan. While Medicaid typically does cover such services, you must meet income and asset tests to qualify. As a result, some people turn to their savings, investments, life insurance, or home equity to cover the costs.
However, long-term care insurance can help you avoid depleting your assets to get the care that you or your loved one needs, whether in a setting such as a nursing home or your own home.
Who Should Consider Long-Term Care Insurance?
Long-term care insurance is not the best option for everyone. This is why it is important to work with an estate planning attorney who will tailor an estate plan, including one that integrates long-term care, which meets your unique needs and goals.
When deciding whether to integrate long-term care insurance into your estate plan, some of the critical factors you should consider are:
- Health – In contrast to Medicare supplement, or “gap,” coverage, a company can reject your application for long-term care insurance if you have a preexisting condition such as cancer or heart disease and present a serious health risk.
- Age – The older you get, the more difficult it may be to obtain long-term care insurance at an affordable rate due to the higher risk of developing a chronic illness at an older age.
- Income – If your annual income does not allow you to pay your monthly long-term care insurance premiums without facing financial hardship, you may want to consider other options. You should plan for the possibility of your premiums increasing due to inflation.
- Assets – If the costs of long-term care insurance are higher than the value of the assets you want to protect, excluding your primary residence, you may want to consider a different option.
Key Features of Long-Term Care Insurance Policies
Another factor to consider when choosing a long-term care insurance policy is the maximum policy benefit. Coverage is typically limited by dollar amount or the number of years it will be provided. A plan may also limit benefits to a daily benefit amount, or the amount of coverage provided per day based on the type of care received.
Policies typically have an elimination or waiting period clause. The provision will require that you receive — and pay on your own — for long-term care services for a certain length of time until the insurer provides benefits.
A policy may also have exclusions. For instance, although a policy cannot exclude coverage for conditions such as Alzheimer’s disease, dementia, and organic brain disease, coverage of long-term care for those with other types of mental illnesses may be denied. Additionally, most policies exclude coverage of conditions brought on by alcohol or drug use, or conditions that are the product of self-inflicted harm.
Keep in mind: When you purchase a long-term care insurance plan, it is “guaranteed renewable” as long as you pay your premiums. This means an insurer cannot raise your premiums or terminate your coverage if your health worsens. However, your rate can be adjusted to reflect inflation.
Integrating Long-Term Care Insurance With Medicaid Planning
To qualify for Medicaid, you cannot simply give away your assets. In New York, there is a five (5) year “lookback” period during which any assets you transfer without receiving adequate compensation can be deemed to have been made solely to qualify for nursing home Medicaid. There is currently no lookback period for homecare Medicaid, but it is scheduled to change to thirty (30) months in 2025.
If it is found that you tried to hide or transfer your assets to qualify for Medicaid, you will be ineligible for Medicaid benefits for a penalty period based on the value of the transfer. For this reason, a sound Medicaid plan, which involves “spending down” your assets to obtain eligibility, may integrate long-term care insurance.
Common Mistakes to Avoid With Long-Term Care Insurance
Before you purchase a long-term care insurance plan, you should take care to avoid some common mistakes, such as failing to:
- Compare outlines of coverage for several different policies to determine which one provides the benefits that meet your objectives
- Research the insurer’s premium increase history to see whether it has consistently raised its premium rates in the past
- Submit an accurate and complete application
- Ask the insurer all questions you have about the policy’s benefits limits and other features
- Consult with an experienced New York estate planning, Medicaid planning, and elder law attorney who can help you determine whether long-term insurance is right for you and work with you to integrate long-term care in your estate plan
If you already have a long-term care insurance plan but have questions about the coverage it provides, the estate planning attorneys at Amoruso & Amoruso LLP can conduct a thorough review of it for you. Rest assured, if the plan meets your long-term care objectives and financial circumstances, we will tell you.
How Amoruso & Amoruso LLP Can Help
Long-term care insurance can help you or a loved one get the care you need without depleting your assets and resources. However, the decision to enroll in a long-term care insurance plan should not be an isolated one. Instead, it should be part of a comprehensive estate plan designed to protect you and your family.
At Amoruso & Amoruso LLP, we are focused on Empowering You to Care for the Ones You Love™. Contact us today to learn more about long-term care insurance and what our experienced and nationally recognized New York estate planning attorneys can do for you.
