Long-term care myths vs facts for Arizona families

The biggest long-term care myth is that Medicare or your health insurance will pay for it. They will not: Medicare.gov states that Medicare does not pay for long-term care, also called custodial care. The next biggest is that you will not need it, when the federal LongTermCare.gov site estimates that someone turning 65 today has almost a 70% chance of needing some type of long-term care. In Arizona, the public program for long-term care, ALTCS, has strict income and asset rules. Knowing the facts early is what keeps your options open.

Myth: Medicare will cover my long-term care

Fact: Medicare does not pay for long-term custodial care, such as help with bathing, dressing or eating, at home or in a nursing home. Medicare Supplement policies and Medicare Advantage plans do not fill that gap either.

What Medicare does cover is short-term skilled care after a qualifying hospital stay, such as rehabilitation in a skilled nursing facility, for up to 100 days per benefit period, and only while you need skilled care. When the skilled need ends, the coverage ends, even if you still need help every day.

This is the myth we hear most often, and it is the most expensive one to believe. Families often discover the gap when a parent is ready to leave rehab but still cannot live safely alone, and the facility explains that Medicare coverage has ended.

Myth: My health insurance or disability policy covers it

Fact: ACA health plans and employer health plans are built for medical care, not for ongoing help with daily living. Disability income insurance replaces part of your paycheck while you are working age; it is not designed to pay for care in retirement. Long-term care insurance, or a life or annuity policy with long-term care benefits, is what covers this risk.

The same is true for Medicare Advantage and Medicare Supplement plans for people over 65. Some Medicare Advantage plans offer limited in-home support benefits, but those are not a substitute for long-term care coverage.

Myth: AHCCCS will pay, so I do not need to plan

Fact: Arizona’s Medicaid long-term care program, ALTCS, does pay for care for people who qualify. It serves people who are 65 or older, blind or disabled and need a nursing facility level of care, and who meet income and resource limits. For many families that means spending down savings first, and AHCCCS may recover costs from an estate later.

If protecting some of your savings matters, look at the Arizona Long Term Care Partnership Program. A certified Partnership policy can let you keep assets equal to the benefits it paid if you later apply for ALTCS.

Relying on ALTCS can also limit your choices. ALTCS members receive services through the program's contracted providers and settings, which may not be the specific assisted living community or home care arrangement you would have chosen with your own money.

Myth: Only older people need long-term care

Fact: Most people who need long-term care are older, but a stroke, an accident, multiple sclerosis or an early onset illness can create the need at any age. That is also why buying coverage while you are younger and healthier tends to be both easier and less expensive.

Younger adults also tend to underestimate how long recovery can take after a serious accident or illness. Even a few months of help at home can strain a household budget, especially if the person who needs care was also earning an income.

Disability income insurance can protect a working-age paycheck, while long-term care coverage protects your savings and choices later. Many families eventually need both conversations, and neither one replaces the other.

Myth: My family will take care of me

Fact: Families provide most care in this country, and they do it with love. But caregiving can mean a spouse’s health suffering, or an adult child cutting hours at work. And some care, such as lifting, overnight supervision or dementia care, may need trained help. Insurance does not replace family. It gives family the money to bring in help so they can be family, not exhausted caregivers.

Talk with your family now about what you would want. Where would you prefer to receive care? Who would make decisions if you could not? Who is named in your health care power of attorney? Insurance is one part of the plan; those conversations are another.

If you do rely on family, plan for it: write down your wishes, name who would coordinate care, and decide how paid help would fit in when family needs a break.

Myth: I will never use it, so it is wasted money

Fact: Nobody calls home insurance wasted when the house does not burn down. Still, if paying for coverage you might not use is the sticking point, a hybrid policy pays a death benefit if you never need care. Our guide to hybrid versus traditional coverage explains the trade.

It may help to think about who carries the risk. Without insurance, your savings, your home and your family carry it. With insurance, part of that risk moves to an insurance company. Whether that trade is worth the premium is a personal decision, but it should be a decision rather than something you never got around to.

Myth: It is too expensive for people like me

Fact: Cost depends heavily on your age, health and the design you choose. A policy does not have to cover every possible dollar of care. Many people insure part of the risk, choose a longer elimination period, or pair a modest policy with savings. Short-term care insurance, which covers a year or less of care, is another lower-cost option for some people.

Long-term care insurance is also not only for the wealthy. People with very high assets may choose to self-insure, and people with very limited assets may rely on ALTCS. Middle-income families, the people with the most to lose, are often the ones who benefit most from some form of coverage.

What a plan can look like without a big policy

Planning is not the same as buying the largest policy you can find. It is about deciding ahead of time how care would be paid for, so the decision is not made in a hospital discharge office. Viola holds the Certified in Long-Term Care designation and can help you weigh all of these options.

• A modest traditional policy with a longer elimination period, combined with savings for the first months of care.
• A hybrid policy funded by money already set aside, so the dollars are used either way.
• A chronic illness rider on a life policy as a first layer.
• A short-term care policy for people who cannot qualify for traditional coverage.
• A written plan with your family about where you would want to receive care and who decides.

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The bottom line

The facts are not meant to scare you. They are meant to give you time. Visit our Long-Term Care Insurance page, join one of our seminars, or book a conversation with Viola. As a Certified in Long-Term Care advisor, she will explain your options in plain English, subject to underwriting, so the plan is yours.