Assisted Living: Does Insurance Cover the Costs?
Here's a burning question we may all have to ask ourselves eventually: how will we cover the costs of assisted living? According to US News Health, you can expect to pay over five grand monthly for assisted living.
The article goes on to say that people meet these costs through a combination of income sources. Planning before you need assisted living is one of the best ways to ensure you'll have enough money to meet costs.
Reverse mortgages are another suggestion, but what about insurance for assisted living? Could senior care insurance help with the costs of assisted living? Read on to find out. Below, we discuss insurance and elderly care.
Insurance for Assisted Living: Can It Help?
The answer to whether insurance will pay for assisted living is complicated. Technically, insurance will not cover assisted living costs.
Health insurance covers a plethora of services, procedures, and treatments, such as:
- Hospitals and doctor's visits
- Visits to primary physicians, specialists, and other medical providers
- Covers health care services at the hospital
- Essential health benefits
- Emergency services
- Ambulatory patient services (outpatient care)
- Hospitalization
- Mental health services
- Prescription drugs
- Pregnancy, maternity, and newborn care
- Pediatric services
- Including oral and vision care
- Preventative and wellness services
- Including chronic disease management
- Laboratory services
- Rehabilitative and habilitative services and devices
- Birth control and breastfeeding services
- Preventative services
- Prescriptions
- Pre-existing conditions
Health insurance does not cover cosmetic surgeries, fertility treatments, and medications unapproved by the U.S. Food and Drug Administration (FDA).
Of course, there are sometimes exceptions to the rule. There is a chance that your insurance will pay for assisted living, but most do not. Remember, we did say "technically."
Your normal health insurance may not cover assisted living community costs, but there are coverages out there that will. Again, technically, assisted living insurance coverage doesn't exist.
You won't find anything called such if you search on Google. Instead, you'd find various specific types of insurance, one of which is long-term care insurance.
What Is Long-Term Care Insurance?
Long-term care insurance was designed to cover nursing homes, in-home assistance, and assisted living costs. However, this type of senior care insurance doesn't completely pay for assisted living.
Most of these policies vary in coverage and cost. You may find one that will completely pay for assisted living expenses, but you shouldn't expect that to be a given.
Research is key when searching for a long-term care insurance policy. Compare policies to see what works best for your budget or speak to your agent to see what your plan covers.
How to Qualify for Long-Term Care Insurance?
You don't have to be an elderly adult to qualify for long-term care insurance. Most healthy adults 18 and older can apply, it's just that most claims aren't filed until around 70 years or older.
The benefits kick in when a person can no longer perform two or more of the six activities of daily living (ADLs). The six ADLs are:
- Bathing
- Washing, rinsing, and drying your skin
- Ambulating
- Walking
- Getting in and out of bed and moving to and from chairs
- Eating
- Chewing and swallowing your food
- Using utensils to bring food to your mouth
- Dressing
- Putting clothes on in the correct order
- Using buttons, zippers, velcro, and snaps
- Toileting
- Getting on or off the toilet
- Taking off or putting on clothes
- Cleaning genitals
- Continence
- Controlling bladder and bowel function
You must have demonstrated difficulty performing at least two ADLs for 90 days or longer. Long-term care insurance benefits also begin if you have a cognitive impairment.
Some policies enable the need for standby assistance to activate benefits. People who don't smoke are shown to get preferred health ratings.
A preferred health rating is a life insurance rating given to people in excellent health and are less risky to insure. Smoking is known to lead to various potential health complications.
Practically, it makes sense why smokers would receive lower health ratings. Insurers may outright decline to issue a policy to someone with serious medical conditions like Parkinson's and Alzheimer's.
Other Types of Senior Care Insurance
There are other kinds of assisted living insurance coverage, like hybrid life insurance, a combination of long-term and life insurance. Traditional long-term policies operate on a use-it-or-lose-it basis.
What this means is if you don't make a claim, you don't get paid. Hybrid policies ensure you get a payout, no matter what. Part of the death benefit can cover assisted living expenses if you need long-term care.
If you pass away during your policy term, your beneficiaries get a death benefit. Said benefit is usually tax-free.
There is also life insurance conversion, where you can sell your policy to a third party for its market value. Once the funds, you can use them to buy a long-term care policy.
People who do this often get to keep some of their death benefits. You can apply for a cash advance on your life insurance's death benefit to purchase long-term care benefits.
How much you get depends on your pre-existing policy. However, there's usually a cap at half the death benefit. Long-term care riders are another way to supplement your insurance policy to pay for assisted living.
A long-term care rider is an add-on that lets you use part or all of your death benefit to pay for assisted living community services. You can add these riders to whole or universal policies.
However, it's not typical to be allowed to add one to a term life insurance policy. Whole and universal life insurance policies are permanent.
The difference is that whole life insurance has fixed premiums, and universal does not. Term life insurance is set for a specific duration.
Understanding Senior Care Insurance
Paying for senior care can seem daunting, and finding insurance for assisted living may feel like navigating a complex maze. Hopefully, our guide has helped clear up some confusion and misconceptions.
Addington Place of Lee's Summit may not know the right insurance for you, but we can help in other ways. Our resident-focused lifestyle programs and services are specifically designed to reduce stress.
Our staff is on hand 25/7 to lend a helping hand to all boarders with ADLs and housekeeping. Contact us to arrange a tour today, and consider our Military Veterans discount program.