Government Benefits Available To Seniors

Carol Sikov Gross, CELA*

I. WHAT IS SOCIAL SECURITY?

Social Security provides a variety of benefits to workers, retirees, disabled persons, spouses or divorced spouses, dependent children, disabled adult children, etc., under the Social Security Act, 41 U.S.C. § 401 et seq. The official title of this Act is the Federal Old Age and Survivors Disability Insurance Benefits Act. (See the regulations at 20 C.F.R. §404.1 et seq.) One can even determine online which different Social Security Programs for which he or she might be eligible by using "BEST" - Benefit Eligibility Screening Tool.

To obtain more information: http://www.ssa.gov/; 1-800-772-1213

All monthly benefits under Social Security are based on a worker's Primary Insurance Amount (PIA). This is the amount a fully insured worker would receive at retirement at normal retirement age. However, a person may retire at age 62 and receive a reduced benefit amount, which is 80% of the PIA. If a person retires at normal retirement age, that person receives 100% of the PIA. Normal retirement age was increased for many working Americans beginning in January of 2000. Sixty-two is still the earliest age at which a person can retire and collect reduced benefits but the age for collecting full Social Security for those born in 1938 or later has increased from age 65 to age 67 for those born in 1960 or later. The changes in normal retirement age are being slowly phased in. For example, those born between 1943 and 1954 reach normal retirement age at 66.

With regard to changes in the amount of Social Security, annual cost of living adjustments to the monthly benefit amount become effective in January of each year.

Spouses or Divorced Spouses

With regard to spouses or divorced spouses (See 42 U.S.C. §402(b), 20 C.F.R. §440.333), the spouse must be at least 62 or be taking care of a child who is under 16 or disabled and who is entitled to children's benefits on the worker's earning record. The amount of benefits payable to the spouse depends on the age of the spouse when applying for benefits. The amount will be less if the spouse is 62 than if the spouse is 65. If the spouse is caring for an eligible child, the spouse receives 50% of the PIA during the years the child is eligible for Social Security children's benefits.

The fully insured worker must be receiving benefits before the spouse can begin collecting on the worker's record. A divorced spouse can collect benefits based on an ex-spouse's work record at the time the worker becomes eligible for benefits, that is at age 62. However, the divorced spouse has to meet certain conditions before he or she can collect Social Security on the ex-spouse's work record. First, the marriage must have lasted 10 years or longer before the decree in divorce was granted. Second the divorced spouse must be 62 and not presently married. Third, the divorced spouse must not be entitled to an old age or disability benefit that would be larger than the ex-spouse's benefit. Fourth, the divorce must be more than 2 years old before the divorced spouse is eligible unless the divorce takes place after the worker is entitled to benefits. Please note that a divorced spouse under 62 taking care of a child may not receive benefits even though a married spouse taking care of a child would receive benefits. Also, a divorced spouse who remarries before 60 is not eligible for benefits unless the worker dies before the remarriage takes place.

CHILDREN

A worker's dependent children are entitled to receive benefits if unmarried and under the age of 18, or over 18 and still in high school or over 18 and disabled, provided that the disability is proven before 22. Each child can receive 50% of the worker's PIA, based on the PIA of either parent, whichever amount is greater. It does not matter if the child is natural, illegitimate, acknowledged, a stepchild or adopted. (See 42 U.S.C. §402(d), 20 C.F.R. §404.350.)

SURVIVOR'S BENEFITS

Survivor's benefits are paid to a worker's spouse or divorced spouse, unmarried dependent children or even parents, provided that certain conditions are met:

  1. Widow or Widower - the spouse is the widow or widower who is unmarried, at least 60 or at least 50 and disabled
    --was married to the worker for at least 9 months prior to the worker's death or is a surviving divorced spouse who is unmarried, at least 60 or at least 50 and disabled
    -- is not entitled to equal or larger benefits on spouse's own work record
    -- can receive 71.5% of worker's PIA if apply at 60 or 100% at if apply at 65
    -- remarriage before 60 means that no benefits are payable unless the remarriage ends but benefits are not forfeited if remarriage takes place after 60
  2. Children -- requires relationship, dependency and age just as for a retired worker's children's benefits. Each child received 75% of the deceased parent's PIA subject to the family maximum of between 150% - 180% of the worker's PIA. (This family maximum does not include the amount paid to a divorced spouse and is only between 100% - 150% for a disabled worker.)
    A stepchild must prove that he/she was living with the worker at the time of death or received at least ½ of his/her support from the worker. An adopted child is entitled to benefits if the child lived with the worker or received ½ of his/her support from the worker in the year prior to death.
  3. Surviving Dependent Parents - this benefit can be paid to a parent who is 62, who has not married since the death of the insured, who is not entitled to old age benefits equal to or greater than the amount of the parent's benefit and who received at least ½ of their support from the insured deceased child. The parent must be a natural parent or a parent who adopted the child before the child turned 16 or a stepparent who married the insured's parent before the insured turned 16. A parent can receive 82.5% of insured PIA; however, this amount can vary depending on how many parents apply for benefits and when the parents apply.

II. WHAT IS SUPPLEMENTAL SECURITY INCOME?

Supplemental Security Income (SSI) is a program which provides monthly income to people who are age 65 or older, or who are blind or disabled, and who have limited income and financial resources. It can also pay benefits to children who are disabled or blind. Information on the SSI program can be found at 42 U.S.C. §1381 et seq. and 20 C.F.R.§416-101 et seq. A person who is on SSI may also be able to get other benefits, such as food stamps. One applies for SSI at a Social Security Office.

To be eligible for SSI, financial resources must be below $2,000 for a single person or below $3,000 for a married couple. Certain resources are not counted:

  • the home in which the applicant lives and the land it's located on life insurance policies with a face value of $1,500 or less;
  • a car
  • burial plots for the applicant and members of immediate family
  • up to $1,500 in burial funds and up to $1,500 in burial funds for spouse

As of January, 2004 the basic SSI payment for an eligible individual is $564 per month and $846 per month for an eligible couple. Pennsylvania pays a supplement to the federal SSI amount. If one is married, and only one person is eligible, a portion of the spouse's income may be counted. Eligibility for SSI is possible even if one never worked in employment covered under Social Security. Generally, to be eligible for SSI, an individual also must be a resident of the United States and must be a citizen or a non-citizen lawfully admitted for permanent residence. If one gets SSI, one may also be able to get Medicaid.

With regard to income eligibility, certain income is not counted:

  • the first $20 of most income received in a month
  • the first $65 a month earned from working and half the amount over $65
  • food stamps
  • shelter from a private nonprofit organizations
  • most home energy assistance

III. WHAT IS MEDICARE?

Medicare is a federal health insurance program which is administered by the Centers for Medicare and Medicaid Services (CMS). It is governed by Title XVIII of the Social Security Act, 42 U.S.C. §1395 et seq. Medicare regulations are found at 42 C.F.R.§405 through 424. One can obtain Health Insurance Manuals (HIMs) and rulings which interpret the law and provide information to health care providers, fiscal intermediaries (insurance companies under contract to the federal government who pay Medicare claims), insurance carriers and state agencies through Social Security offices. 42 C.F.R. §401.130

To obtain more information: http://www.cms.gov/; http://www.medicare.gov/; 1-800-Medicare (1-800-633-4227)

ELIGIBILITY REQUIREMENTS

To be covered by Medicare, a person or their spouse must have worked for at least 10 years in Medicare covered employment or pay premiums for coverage. If a person is denied Medicare eligibility, an appeal can be filed by following the Social Security procedures. 20 C.F.R. §404.900

  1. People age 65 or older entitled to receive SS survivor or retirement benefits or RR benefits (42 C.F.R. §406.10; 42 U.S.C. §426 (1) (C) and (a)(2)(B)) AND who are
  2. U.S. citizens or permanent (5 years or more) residents OR
  3. Disabled persons under age 65 who have been collecting Social Security Disability Insurance (SSDI) or RR disability for 25 months OR
  4. Persons under age 65 with End Stage Renal Disease (ESRD) who meet applicable earning requirements
  5. Benefit Period: Benefits are paid based on a "Benefit Period" which begins with inpatient hospitalization and which ends when the patient not in the hospital or a skilled nursing facility for sixty (60) consecutive days (42 C.F.R. §409.61(a)(1)(i)) If one goes to a hospital 61days after the first benefit period ends, a new benefit period begins. There is no limit on the number of allowable benefit periods.

TYPES OF MEDICARE COVERAGE

A. PART A -- HOSPITAL INSURANCE (42 C.F.R. §406.1 et seq.)

Hospitalization, skilled nursing facility care, home health care, hospice care

A person can get Part A at age 65 without paying premiums if:

  1. one is already getting retirement or survivor benefits from SS or RR,
  2. one could receive SS or RR benefits but has not yet filed for them OR
  3. one has Medicare covered government employment

A person under age 65 can get Part A if (a) one has received SSDI, RR Disability Benefits or other government employee disability benefits for 25 months or (b) one is receiving kidney dialysis or is a kidney transplant patient as a result of ESRD

1. Care in the hospital

  • First 60 days - Everything is paid for except for $876 deductible for 2004
    (This deductible is paid once per benefit period.)
  • Day 61 - 90 Medicare pays all but $219 coinsurance payment per day

Lifetime Reserve days - If one is in the hospital for more than 90 days in a benefit period, lifetime reserve days can be used to help pay for one's care. When one is using a lifetime reserve day, Medicare pays all of the covered costs except for $438 coinsurance payment per day.

Medicare recipients receive 60 lifetime reserve days and once a day is used, it is GONE. Lifetime reserve days do NOT renew as other benefits do once the benefit period ends.

Covered Hospital Services

Semi-private room
Meals
Regular nursing
Rehabilitation services
Drugs
Medical supplies
Lab tests & X-rays
ICU & Coronary care
Operating/recovery rooms
Other medically necessary services and supplies

Hospital Charges Not Covered

Phone
TV
1st 3 Pints of Blood
Private duty nurses
Private room unless medically necessary

Other coverage limitations:

  1. Care must be provided in a Medicare certified facility (except for emergency) (42 C.F.R. §409.100)
  2. Services must be reasonably necessary for diagnosis or treatment (42 C.F.R. §411.15 (k))
  3. Psychiatric inpatient hospital days have a lifetime limit of 190 days (42 C.F.R. §409.62) (These days can be reduced by up to 150 days depending on the number of days the patient was an inpatient in a Medicare certified psychiatric hospital prior to becoming eligible for psychiatric inpatient benefits.)

Skilled Nursing Care for Restorative Care in a Medicare approved skilled nursing facility following a 3 day hospital stay

Day 1 - 20 Medicare pays for all covered services
(Covered services include nursing, bed and board, therapies, drugs, supplies and therapeutics, etc.)

Day 21 - 100 Medicare pays for all except $109.50 coinsurance payment/day in 2004

Day 101 - Medicare pays 0%
Medicare does not cover custodial care or intermediate care

NOTE: If a person has Medicare Managed Care a/k/a Medicare + Choice a/k/a Security Blue, one pays $0 for days 1 - 100 and a 3 day prior hospital stay is not required before admission to a Medicare approved skilled nursing facility for skilled care.

3. Home health care

Home health care services may be needed when one is confined to home and needs skilled nursing care, physical therapy, speech language pathology or occupational therapy on a part-time or occasional basis under a physician ordered and regularly reviewed plan of care. Medicare Part A will pay for medically reasonable and necessary services such as skilled nurses, home health aides, medical social workers or therapists. The services must be provided by a licensed, certified home health care agency. There is no coinsurance or deductible except for a 20% coinsurance payment on durable medical equipment.

This coverage extends to cover the full cost of some medical supplies and 80% of the approved amount for durable medical equipment such as wheelchairs, hospital beds, oxygen and walkers. Much of the payment for home health care services has shifted under Medicare from Part A to Part B for persons who have both coverages. However, these changes are not readily apparent to the person receiving the services since no co-payments or deductibles apply and since persons with just Part A will still get full coverage. The shift of these costs from Part A to Part B could, in the future, cause Part B premiums to rise more quickly.

4. Hospice care

A person who is terminally ill can elect to receive hospice care rather than regular Medicare benefits for illness management. Hospice care is designed to provide comfort and relief from pain. (42 C.F.R.§418) These services can be provided by a private or a public agency for two periods of 90 days and one subsequent period of 30 days, or up to 210 days. (Sometimes, hospice care can extend longer.)

5. Blood after first 3 pints

Medicare Part recipients must either pay for or replace the first 3 pints of blood used each year. (Blood is also covered by Part B. One must only meet the deductible under Part A or Part B.)

B. PART B -- SUPPLEMENTAL MEDICAL INSURANCE (42 CFR §407.10)

The monthly premium in 2004 is $66.60, which is deducted from SS, RR or Civil Service Retirement.

Part B operates on a calendar year benefit period and helps to pay:

Doctor bills (no matter where service is received)
Outpatient hospital services
X-rays and laboratory tests
Ambulance (limited)
Breast prostheses after mastectomy
Services of certain specially qualified practitioners who are not doctors
Physical and occupational therapy
Speech language pathology services
Home health care (if do not have Part A)
Blood after first 3 pints
Flu, pneumonia and hepatitis B shots
Pap smears (once/three years)
Mammogram (once every 12 months after 40)
Outpatient mental health services
Artificial limbs and eyes
Arm, leg, back and neck braces
Durable medical equipment
Kidney dialysis and transplants
Medical supplies

Part B has an annual deductible of $100.00 and pays 80% of the Medicare-approved amount for most services. The patient is responsible for a 20% coinsurance payment. (Sometimes, the coinsurance payment may be higher than 20%.)

Health care practitioners in Pennsylvania are prohibited from charging a Medicare recipient an amount above the Medicare approved amount. (35 P.S. §449.31.) Participating doctors accept assignments of all Medicare claims

  1. If a doctor accepts assignment, the doctor will not charge more than the 20% coinsurance to the Medicare Part B recipient.
  2. If a doctor does not accept assignment, the doctor may still not charge more than 15% over the Medicare-approved amount.

C. APPLYING FOR MEDICARE

If a person is already getting SS or RR benefits when turning 65, there is no need to apply for Medicare. One will automatically be enrolled for Part A and Part B and will receive a Medicare card approximately 3 months before the 65th birthday.

If a person is not receiving SS or RR benefits before turning 65, there is a need to apply for Medicare, which should be done 3 months before the 65th birthday. It is best to apply early to avoid a possible delay in the start of Part B coverage. A person's 65th birthday is the beginning of a 7th month initial enrollment period. If one misses this 7 month period, one must wait until next general enrollment period.

Each year, there is a general enrollment periods which starts January 1st and ends March 31st. If one enrolls during a general enrollment period, Part B coverage starts the following July.

If a person waits 12 or more months to sign up for Part B, the monthly premium that must be paid for Part B coverage is generally higher. Part B premiums go up 10% for each 12 month period that a person could have been enrolled but was not enrolled. For example, if Jane applied 12 months late for Part B, she would have to pay $55.00 per month rather than the $50.00 per month she would have paid if she had applied on time. This Part B premium will keep going up.

If a person waits to apply for Part A, the premium (if one has to pay a premium) only goes up 10% no matter how late the enrollment occurs. Part B enrollment can be delayed. If one is age 65 or over and has group health insurance through employment (either their own or that of their spouse) OR if one is disabled and has group health insurance, there is a choice:

  1. One may enroll at any time while covered by the group health plan OR
  2. One can enroll during a special 8 month enrollment period that begins the month employment ends or the month there is no longer coverage under an employer's plan, whichever comes first.

There is no reason to have both group health coverage and Medicare Part B because the group health coverage is primary. Part B only covers after the group health plan has paid. One can reject the employer's group health insurance and make Medicare primary BUT group health insurance cannot supplement a Medicare covered service

Medicaid Buy-In for Medicare Beneficiaries Program

DHS has a program to help pay for Medicare Premiums known as the Medicaid Buy-In for Medicare Beneficiaries Program, which can help to pay the Part B premium if a person is eligible for Medical Assistance and Medicare and is over 65, disabled or has End Stage Renal Disease. To get more information, call DHS or go to www.aarp.org.

D. MAJOR GAPS IN WHAT IS PAID UNDER MEDICARE

  1. Part A deductible for each benefit period - $876 in 2004
  2. Part A coinsurance amounts of $219/day and $438/day for lifetime reserve days
  3. Part B deductible of $100 per year
  4. 20% Coinsurance for most covered services under Part B
  5. 1st 3 pints of blood
  6. Home health care that doesn't meet certain required conditions
  7. Skilled nursing facility care after day 100
  8. Skilled nursing facility care coinsurance of $109.50/day
  9. Custodial nursing home care
  10. Outpatient prescription drugs
  11. Eyeglasses and Hearing Aids
  12. Dental Care
  13. Routine physicals, eye exams and audiological exams
  14. Transportation
  15. Emergency care or treatment outside the U.S.

E. MEDICARE DOES PROVIDE COVERAGE FOR:

  1. Annual mammogram for women age 40 and over. 42.C.F.R. §410.34
  2. Screening pelvic exams for "high risk" women. 42 C.F.R. §410.56
  3. Annual prostate cancer screening for men age 50 and over
  4. Colo-rectal cancer screening for those age 50 and over. 42 C.F.R. § 410.37
  5. Diabetes self-management training and outpatient management services. 42 C.F.R. §410.52
  6. Bone density screening for women at high risk for osteoporosis.

IV. WHAT IS MEDIGAP INSURANCE?

Medigap insurance is private supplemental insurance designed to help pay Medicare cost sharing (coinsurance) amounts. It is sold to cover the gaps in the coverage provided by Medicare. There are 10 standard policies, Plans A through J, and each offers a different combination of benefits. Companies selling Medigap insurance must each offer the same coverages so cost is the major difference between their policies.

One should buy Medigap coverage during an open enrollment period, which is a 6 month period from the date of first enrollment in Medicare Part B once one is 65 or older. One cannot be turned down or charged higher premiums due to poor health if one buys the Medigap policy during an open enrollment period. Once the open enrollment period ends, one may only be able to buy whatever Medigap policy an insurance company is willing to sell based on health, age, and other factors. If one has Medicare Part B but is under 65, the 6 month Medigap open enrollment period begins at one's 65 birthday.

A Medigap policy generally doesn't pay benefits to a person who is enrolled in a Medicare Managed Care plan or a Medicare HMO plan or Medicare Part C plan.

All the plans include basic benefits which are:

  1. Part A coinsurance
    Day 1- 60 $0
    Day 61-90 $219/day
    60 lifetime reserve days $438/day
    + coverage for365 additional lifetime days after Medicare benefits end
  2. Part B coinsurance (to pay the 20% of Medicare-approved expenses)
  3. 1st 3 pints of blood each year

Plan A only provides the basic benefits. Plan B and above add coverage for the inpatient hospital deductible of $876 per benefit period. Plan C and above cover skilled nursing facility coinsurance payments of $109.50 per day in 2001 and also provide coverage for foreign travel emergencies. Plan C also covers the Medicare Plan B $100 deductible.

Plans H and I add a basic prescription drug benefit which pays 50% of prescription costs per year up to $1,250 after the payment of a $250 deductible. Plan J offers an extended prescription drug benefit which pays 50% of prescription costs per year up to $3,000 after the payment of a $250 deductible.

MEDICARE MANAGED CARE OPTION, MEDICARE PART C AND MEDICARE + CHOICE

Medicare eligible individuals may elect to enroll in a Medicare Managed Care Plan or Medicare HMO under contract with the federal government to provide the Medicare package of benefits. A number of different terms can be used to designate such a plan, such as Medicare Part C, Medicare + Choice, etc. One considering such a plan must weigh the freedom of choice in the Medicare fee of service system against the cost savings generally associated with an HMO. With an HMO, one usually has a primary care physician or gatekeeper who controls one's access to medical services. The regulations governing Medicare Managed Care plans are located at 42 C.F.R. §417.

A person is either enrolled in the traditional Medicare fee for service program, and possibly a Medigap plan, OR enrolled in managed care but not both. One gets to keep their Medicare card under either option which can cause some confusion. One also pays the Medicare Part B premium each month.

Cost of Medicare Managed Care Plans

  1. A managed care plan may charge premiums in addition to the Part B premium.
  2. A managed care plan may require the payment of deductibles and coinsurances so long as these amounts do not exceed, on average, the actuarial value of the deductible and coinsurance for which the Medicare enrollee would otherwise have been responsible. (42 C.F.R. §417.452)

Enrollment and Terminating Enrollment

A managed care plan has a general enrollment period each year for 3 months, just like standard Medicare coverage. (42 C.F.R. §417.420, 417.426) Once enrolled, one can un-register for any reason or for no reason. (42 C.F.R. §417.461)

NEW DRUG PRESCRIPTION PLANS

Starting in late April, 2004, Medicare beneficiaries will be able to compare prices of drugs offered by the drug card programs at http://www.medicare.gov/ or by calling 1-800-MEDICARE. This information will help consumers compare discounted prices negotiated by the card sponsors, in addition to the enrollment fees, and other card program features. Customer service representatives will also answer questions about the various drug programs to help seniors covered by Medicare to compare drug cards on price and network pharmacies, and refer callers to other appropriate resources. Other aids to seniors with regard to making decisions about prescription drug coverage will include a detailed "Guide to Choosing a Medicare-Approved Drug Discount Card" for beneficiaries that explains the program, including eligibility and enrollment information, and provides step-by-step guidance for comparing discount cards and choosing one. A mailing will be sent directly to every Medicare household along with a separate letter to Medicare beneficiaries with lower incomes, who are likely to be eligible for the $600 prescription drug credit. Companies offering plans in this area include Highmark, UPMC, University of Pittsburgh Medical Center and Keystone.

V. WHAT IS MEDICAL ASSISTANCE?

Medical Assistance or Medicaid pays for about ½ of all current Nursing Home residents. It is the payor of last resort, after other sources have been exhausted. To be eligible for Medicaid, an applicant must meet three eligibility tests:

  1. Medical Eligibility - medically need long term care
  2. Income Eligibility - insufficient income to pay for long term care
  3. Asset Eligibility - very limited assets
    There are three (3) types of Assets:
    1. Inaccessible - assets given away or over which one has no control
    2. Exempt - assets that are not counted for Medical Assistance eligibility
      A home to which one intends to return
      A car
      Cash of up to $2,400 for individual or Institutionalized Spouse*
      One cemetery plot per individual (2 for a married couple)
      Irrevocable burial trust account or a prepaid funeral
      Household furnishings and personal effects
      Life insurance-face value below $1,500 or cash value below $1,000
      Property used in a business or which produces income
      IRA, 401K or Keogh plan of a community spouse
      Community Spouse Resource Allowance - ½ of assets up to a maximum of $92,760 and down to a minimum of $18,552 in 2004
    3. Countable-all other assets such as:
      Bank accounts and certificates of deposit
      Stocks, bonds and Mutual funds
      Other vehicles, boats, motor homes, etc.
      Other real estate besides the home

In order to be eligible for Medicaid, the Applicant may have no more than $2,400.00 in addition to the exempt resources. *Some individuals may be able to protect an additional $6,000 in assets if one's income is low under some new rules.

What causes problems for most people is the Transfer of Assets Rule (a/k/a look back rule or thirty-six (36) month rule) which involves the transfer of assets for less than fair consideration or a gift. Such a transfer results in a period of ineligibility for Medical Assistance purposes and is determined by dividing the value of the assets transferred by the average monthly cost of nursing home care (now $5,559.25). If the transfer is to a trust, the look back period is 5 years. In order to avoid problems with this "rule", it is important to discuss transfers and gifts with an experienced elder law attorney. It is very important that a person does not apply for Medicaid during a period of ineligibility. This period of ineligibility can last for a very long time depending on the value of the gift and when a Medicaid application is filed, so careful planning must be done.

To determine the number of months one may be ineligible for Medicaid if a gift has been made, also known as a transfer without fair consideration, the amount of the gift is divided by the average cost of nursing facility care per month. It is very important not to apply for Medicaid during a period of ineligibility.

Gift/NFC = # of Months of Ineligibility

If a gift of $50,000 was made by a potential Medicaid recipient, the period of ineligibility would be calculated as follows: $50,000/$5,559.25 = 8.99 months, rounded down to 8 months*

*Proposed regulations may do away with the rounding down.

If one is considering the transfer of some assets to another person, it is important to retain at least one-half of the assets or sufficient assets to pay for 36 months of nursing home care. Please be cautious if you transferring assets. These transferred assets will not have to be spent down to pay for nursing home care, but they will no longer be available to the person giving them away to pay for anything else either. And, if the applicant does not keep sufficient assets to pay for 36 months of nursing home or the look back time period changes, one may become ineligible for Medicaid for a longer period of time than 36 months.

Long term care insurance may be available to help avoid ineligibility problems caused by transfers by paying for the nursing home care during the 36 month period from the date one enters the nursing home and transferred the assets. The cost of such insurance depends on a number of factors but the insurance itself can offer a good alternative to self-pay. The premiums for such insurance will be lower for those between 50 and 65 and get more expensive as age increases. Any policy should provide for at least:

  1. Three (3) years of guaranteed renewable coverage
  2. A daily benefit at a minimum of 80% of the per day cost
  3. Cover services for skilled, intermediate and custodial care
  4. No prior hospitalization requirement
  5. Inflation protection (either simple or compound)
  6. Home health coverage
  7. Premium waiver once a claim has been submitted
  8. No failure of coverage for a pre-existing condition

If one is considering long term care insurance, it is very important to:

  1. Deal with a reputable broker, someone who doesn't just work for one company
  2. Check with the State Insurance Department with regard to each company being considered
  3. Check the policy carefully to see the type of coverages provided, the definitions dealing with the level of care, and when the coverage becomes applicable. In other words, what does the policy pay for and when does it start paying?
  4. Compare costs/coverages on different policies
  5. Check claim/payment history for each company

Make sure to buy the best coverage and benefits for what can be afforded. Be sure to tell family members, friends, etc. that there is a policy, its location, when the premiums are due and how to submit claims if it becomes necessary.

Besides the purchase of long term care insurance, other planning tips might be converting countable resources into exempt resources by paying off the mortgage on the home, opening an irrevocable prepaid funeral or burial account, buying a new car, or remodeling the home.

An exception to the 36 month rule is that a home can be transferred for less than fair market value to the community spouse, a minor, a blind or disabled child, a child who has been living in the home for at least two (2) years before the applicant was institutionalized and who provided care for the applicant, or a sibling who has lived in and co-owned the home for at least one year.