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"Tips to Remember When Selecting a Long-Term Care Insurance Plan"

アメリカ 弁護士 法律事務所 法律  長期介護保険プラン選択基準

  • Before you choose a specific policy, check out the company. Be sure that the company you choose is likely to be around and solvent for a long time. Pick a company with a financial rating of B+ or better from financial-ratings services such as A.M. Best, Moody’s, Standard & Poor’s, and Weiss..
  • Make sure your policy will pay benefits for all levels of care in a nursing home (including custodial care), as well as care in assisted-living facilities or other residential-care facilities..
  • A good policy will pay benefits for home care and hospice care, including in-home personal care to help with activities of daily living..
  • Consider whether the amount of daily benefits provided by your policy will beadequate in the future. You should consider only policies with an inflation adjuster that increases benefits by a set percentage, compounded each year..
  • Do not assume that more years of coverage is always better. Very few people need nursing home care for five years or more. Four years is sufficient coverage for most. Three years may be acceptable if the cost of more coverage is simply too much for you..
  • Six months is a reasonable exclusion period for preexisting conditions..
  • Better policies allow payment of nursing home or home health benefits without requiring a prior period of hospitalization as a condition of coverage..
  • Most policies impose waiting periods (commonly 20 to 90 days after you begin receiving nursing home care or home care) before payments under the policy begin. First-day coverage will increase your premium. Consider self-insuring for the maximum waiting period, since utilizing the maximum waiting period will result in significant savings on premium payments. If you have to pay during the waiting period, the loss likely will not be catastrophic..
  • Avoid policies that pay only for “medically necessary” care; this standard is often too discretionary. Most good policies will cover care when the individual needs help with two or more activities of daily living (bathing, eating, dressing, toileting, transferring into or out of a bed or chair, or continence) or, alternatively, when the individual suffers a cognitive impairment. Be sure your policy covers Alzheimer’s disease and other forms of dementia. More than half the residents of nursing homes suffer some form of dementia..
  • Buy a policy only from a company that is licensed in your state and has agents physically present in your state. Out-of-state mail-order policies may leave you powerless to remedy problems if anything goes wrong .

(Fall 2008)

"Plan for Your Long-Term Care"

アメリカ 弁護士 法律事務所 法律  長期介護の準備As you begin to plan for your retirement, you may be shocked at the prices of nursing homes and other supportive housing options. And you may be even more concerned by the fact that government health-care options (such as Medicaid and Medicare) rarely cover the full costs of such care. If so, you may want to look into long-term care insurance now. Long-term care insurance helps pay for extended periods (usually two or more years) of nursing home care, assisted living, inhome care, adult day care, and respite care. It is still a relatively new and evolving insurance product, so the typical features continue to change.

Is it right for you?
Long-term care insurance is best for those with income and assets to protect. One rule of thumb is to consider long-term-care insurance if you are at least fifty-five years old and your assets exceed $200,000. Of course, the decision is never quite that simple, since you also need to take into account your overall debt load, retirement funding, payment for your children’s education, and so on.

What should you look for in a policy?
Examine specific provisions carefully before purchasing a policy, since the conditions and limitations on coverage can be extensive and complex. The best policies cover all levels of nursing home care plus care at assisted-living facilities. Assisted-living facilities provide a level of support that is less than that of a nursing home, and may be a better alternative for many people who can no longer live at home.

Better long-term care policies will also cover home care, which is broadly defined to include not only skilled home health services, but also nonmedical support services such as homemaker services, home health-aide services, and personal-care services. Newer policies even offer coverage options such as adult day care or respite care for your family.

What are the tax implications of long-term care policies?
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) clarified the tax treatment of both premiums and benefits so as to make it the same as for major medical coverage. Under HIPAA, benefits from a federally qualified long-term care policy—that is, a policy that meets minimum federal standards—are generally not taxable. For taxpayers who itemize their deductions, premiums for long-term care, as well as consumers’ out-of-pocket costs for long-term care, can be applied toward meeting the 7.5 percent floor for medical expense eductions (that is, medical expenses are deductible only to the extent that they exceed 7.5 percent of your income). The IRS sets limits based upon one’s age, for the total amount of premiums paid for long-term care insurance that can be applied to the 7.5 percent floor, so check with a tax adviser before taking this deduction.

How much do policies cost?
The cost of long-term care insurance depends on your age at the time of purchase, the extent of coverage, and your health history. Age is clearly the single greatest factor. The policy premium can easily run to $1,500 a year for a fifty-five-year-old, $3,000 for a sixty-five-year-old, and $6,000 or more if purchased at age seventy-five. Once you buy a policy, your individual premium is generally locked in. However, your premiums could change if the company is attempting to raise premiums across the board for all policyholders or if the company is purchased by another company that is attempting to do so.

What about preexisting conditions?
A medical screening is required for most long-term care insurance policies. Many insurance companies will exclude you for certain preexisting health conditions, require higher premiums, or may have a waiting period before benefits will kick in. Because policies can differ on these issues, review any preexisting clauses carefully and make sure you fully understand them. If you have any questions, make sure they are answered before you sign a contract.

How do you evaluate a long-term care policy?
In evaluating long-term care policies, compare several policies side by side. Your state’s insurance department should have names of companies offering long-term care insurance. Most states have begun to set minimum standards and consumer protection guidelines for these policies. Guides for evaluating policies may also be available from your state’s insurance department or your state or local office on aging.

Long-term care insurance policies are still a relatively new insurance product. As such, there are many types and variations. If you have any questions about your policy, make sure you ask a company representative for clarification. If you are still unclear, do not hesitate to talk to your attorney about such concerns, particularly if they relate to your policy contract.

(Fall 2008)

"Reviewing Your Advance Directive"

Reviewing Your Advance DirectiveIn the words of former Supreme Court Justice Benjamin Cardozo, “Every human being of adult years and sound mind has a right to determine what shall be done with his own body.” Health-care advance directives are legal tools that enable you to choose one or more people to make health-care decisions on your behalf when you cannot speak for yourself.

A living will is a type of health-care advance directive. A living will is simply a written instruction spelling out any wishes you have about your treatment or care in the event that you are unable to speak for yourself. A living will says, in effect, “Whoever is deciding, please follow these instructions!” On its own, a living will is very limited―it usually applies only to end-of-life decisions.

A health-care power of attorney (also known as a health-care proxy or medical power of attorney) is another type of advance directive. In a health-care power of attorney, you appoint someone of your choosing to be your authorized agent to make decisions about your health. You can give your agent as much or as little authority as you wish to make health-care decisions; the decisions are not limited to end-of-life decisions. Appointing someone as your agent provides that person with the authority to weigh all the medical facts and circumstances and interpret your wishes accordingly. A health-care power of attorney is broader and more flexible than a living will.

Some lawyers recommend that you create a comprehensive health-care advance directive, which combines the living will and the health-care power of attorney into one document. The document may also include any other directions you wish, including your choices about whether to donate or receive organs and where and how you prefer to be cared for.

When planning for future health-care decisions, it is important to understand that merely completing a health-care advance-directive will do very little good if you skip the most important part of the process: reflecting on what you want and discussing what you want with your family. In order to be effective, the planning process requires that you share your wishes, fears, and priorities with your physician, family, and whomever else you will choose to speak for you when you cannot. Think of the process as a continuing conversation that you will likely need to have more than once. After all, your views may change as you age, and may change dramatically in the event of serious illness. For example, your thinking about end-of-life options would probably be different if you were a healthy 35-year-old than if you were a chronically ill 85-year-old. An advance-directive should be looked at as a work in progress that may be modified at various turning points in your life.

Reviewing Your Advance Directive

Priorities and goals change as your life circumstances change, so review your health-care advance directive with your family and your lawyer periodically. Such review is particularly important when you experience any of so-called Five Ds:

  1. Decade―when you start a new decade of your life;

  2. Death―when you experience the death of a loved one;

  3. Divorce―when you experience a divorce or other major family change;

  4. Diagnosis―when you are diagnosed with a serious health condition; or

  5. Decline―when you experience a significant decline or deterioration of an existing health condition, especially when it diminishes your ability to live independently.

(Fall 2006)

"Crossing State Lines: Is My Advance Directive Still Good?"

Crossing State Lines: Is My Advance Directive Still Good?Health-care providers normally try to respect your wishes, regardless of the form you use to indicate those wishes or the state in which you executed the form. Only if you spend significant amounts of time in more than one state do you seriously need to consider executing an advance directive for each state. In such cases, you should find out whether one document will meet the formal requirements of each state. As a practical matter, you may want to name different agents if one agent is not easily available in all locations. Generally speaking, your agent should be physically close to your place of care.

(Fall 2006)

"The New Medicare: Part D"

The New Medicare: Part DAs most people know, the federal government provides a program of basic health care insurance for older and disabled persons called Medicare. Practically everyone age 65 and older is eligible for Medicare, which consists of three main parts. Medicare Part A covers medically necessary care in hospitals and other facilities, such as skilled nursing facilities and hospices. Medicare Part B, the medical insurance part, covers physician’s services and a variety of other services and supplies. Then we skip a letter of the alphabet to Medicare Part D, which covers prescription drugs. Part D came into effect on January 1, 2006, and replaces the temporary drug discount program that will be phased out by May 2006. If you have high prescription drug costs, you may wish to talk to your lawyer about signing up for Medicare Part D as part of your financial planning for retirement.

How Does Medicare Part D Work?

In order to get prescription drug coverage under Medicare Part D, Medicare beneficiaries must sign up for a Medicare Prescription Drug Plan. There are many different drug plans that are administered by different private entities, such as health insurance or managed care plans. Different plans have different premiums, deductibles, coinsurances, and benefits, within certain guidelines established by the government. You may also wish to consider which pharmacies are part of the plan, and whether the plan has a mail-order option. The average monthly premium for the standard Medicare plan is about $32.

The plans limit coverage to a specific list of drugs (called a formulary), which can change during the year. There are 112 different categories of illness, injury, and affliction, and every drug plan must cover at least two prescription drugs in each category. So, if you are taking a prescription drug, you should be able to find the drug you need if you compare plans in consultation with your doctor and shop carefully.

What Are the Options?

The following four options are available to Medicare beneficiaries:

  1. You can stay in traditional fee-for-service Medicare and enroll in a stand-alone prescription drug plan;
  2. You can join or remain in a Medicare Advantage plan (such as an HMO or PPO) and get all Medicare benefits through the plan;
  3. You can remain with current coverage from another source. If you receive drug coverage from another source, such as an employer, union, or Medigap policy, you will be notified by your current plan whether the current drug coverage will continue, and if it is at least as good as Medicare drug coverage. You will need to find out how the current drug plan works with Medicare before making a decision to enroll in a Medicare drug plan;
  4. You can decide not to enroll in a Medicare plan at this time and go without prescription coverage altogether. As explained below, you will face higher rates if you decide to enroll later.

Enrolling in Medicare Part D

Enrolling in Medicare Parts A and B is easy. Everyone who turns 65 and applies for Social Security is automatically enrolled in Medicare Parts A and B. Enrollment in Part D is different. It is not automatic and there is a separate monthly premium that you pay directly to the plan. This means that when you become eligible for Medicare, you need to take the affirmative step to enroll in a Part D plan that is available in your community.

If you are currently enrolled in Medicare and you do not have drug coverage at least as good as the Medicare drug plan, you will be penalized for late enrollment in Part D. You will have to pay one percent more per month on your premium for every month you waited to enroll after the initial enrollment period. So, if you are a Medicare beneficiary and you waited six months past the initial enrollment period to enroll, your monthly premium will always be six percent more than what others pay. This obviously creates a powerful incentive to enroll on time.

This premium penalty does not apply if you have comparable coverage from another source (such as a retirement health plan) that is certified as providing prescription drug coverage at least as good as Medicare drug coverage.

The Claims Process

For Part D, the claims process may vary, depending on the type of prescription drug plan in which you enroll, whether you receive the prescription from a local network pharmacy or mail order, and whether your medication is included on the plan’s formulary. However, you will probably have to pay the deductible or co-payment at the pharmacy, and the pharmacy will be paid by the plan.

(Winter 2005-2006)

"Standard Benefits Under Medicare Part D"

Standard Benefits Under Medicare Part DThe table below shows the standard benefits provided under Medicare Part D. As explained in "The New Medicare: Part D," plans may differ.

$250 or less Plan pays zero
Beneficiary pays initial deductible of $250
$251 - $2,250 Plan pays 75 percent
Beneficiary pays 25 percent of drug costs.
$2,251 - $ 5,100 Plan pays nothing.
Beneficiary pays 100 percent percent of drug costs.
$5,100 and over Plan pays 95 percent of drug costs
Beneficiary pays 5 percent

(Winter 2005-2006)