Co-Authored by Joanna C. Feldman, Esq.
Long-term care insurance can be a great arrow in one’s quiver of tools when planning for the future. But long-term care insurance premiums can be expensive, or, possibly more importantly, the coverage can be capped in a variety of ways.
Many long-term care insurance (“LTCI”) policies have a maximum benefit that will be paid on a daily basis. Some policies have a maximum benefit that will be paid over the course of one’s lifetime. Some policies have both. If the maximum benefit(s) will not meet the needs of the insured, the insured may face additional significant fees for their care.
For example: Many nursing homes in and around Westchester County cost between $350.00 and $550.00 per day. If one’s LTCI covers $200.00 per day, the insured will still owe the difference to the nursing home. In other instances, the LTCI will be capped at $200,000.00 over the course of one’s lifetime. $200,000.00 sounds like a lot of money, but when the average cost of a nursing home in and around Westchester County is approximately $14,000.00 per month, it goes very quickly. The same issues arise with care at home, even though the cost for care at home can be (somewhat) less expensive than care in a nursing home.
Costs for care are only continuing to increase. Even if coverage under a LTCI policy increases over time (to factor in, for example, inflation or increases in cost of living), those increases may not sufficiently match the rising cost of care.
It’s for these reasons that unless you have an unlimited, iron-clad long-term care insurance policy, it’s still a good idea to meet with an elder law attorney to discuss planning for the future. For many, planning for Medicaid to cover the costs not covered by the LTCI is a good strategy to try to protect their assets in case they get sick some day and need care.