By Sonya Sellmeyer, Consumer Advocacy Officer for the Iowa Insurance Division

This May, as we celebrate Older Americans Month, we are focusing on the need for a strong financial foundation and long-term care insurance might be an option to assist you in building your foundation. Coverage from a long-term care policy may pay some of the policyholder’s cost for in-home care or a facility such as a nursing home.  A study by the U.S. Department of Health and Human Services states 70% of the people turning 65 today will need some type of long-term care. Long-term care insurance can be purchased by anyone willing to pay the premiums.

Who should purchase long-term care insurance?
According to a Genworth 2020 study, the average nursing home cost in Iowa for a semi-private room is $6,570 a month and $7,148 a month for a private room.  Medicare does not provide for long-term care coverage, and a long-term care policy only pays a specific dollar amount each day you spend in a nursing facility or for each home visit.

If you have limited income and resources, you may qualify for nursing facility Medicaid which requires a spend-down before qualifying.  Please contact the Iowa Department of Human Services at 855-889-7985 for additional information regarding Medicaid nursing home benefits. If your resources are above Medicaid level but you cannot afford to pay out of pocket for nursing home costs, you may want to consider purchasing long-term care insurance.

What types of care and services does a long-term care policy cover?
It is important to understand what a long-term care policy covers.  The policy dictates what is covered and the definitions page is a great place to start.  Definitions to be aware of are the types of facilities covered, parameters on home health care, levels of care, and the activities of daily living (ADLs).  Most policies require the policyholder to need assistance with at least two ADLs.  Your policy will also provide information on elimination periods, waiver of premium provisions, and nonforfeiture benefits.

Long-term care insurance can be confusing, but the Iowa Senior Health Insurance Information Program (SHIIP) guide on long-term care insurance provides you with information to assist you in your understanding.  The guide includes information on additional features of a policy plus a checklist for use when shopping for a policy or evaluating an existing policy.  If you need additional assistance please contact SHIIP at 1-800-351-4664.

What about alternatives to traditional long-term care insurance?
In recent years the insurance industry has introduced new hybrid products as alternatives to long-term care insurance.  Speak to a licensed insurance agent about the different types of policy options available.

As always, review any policy that you purchase to ensure you understand the coverages and the terms and conditions. All long-term care policies sold in Iowa require a 30-day minimum free look period.  Review your policy thoroughly and return it within the allotted time frame if you are not satisfied with any of the terms.  

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