Every once in a while, I’ll be talking with a family about the cost of memory care and someone says, “I think Mom has one of those long-term care policies somewhere.”
My response is usually pretty simple: Let’s find it.
Long-term care insurance can potentially be a very valuable resource when someone needs assisted living, memory care or care at home. The problem is that policies vary significantly, and families sometimes don’t know exactly what Mom or Dad purchased 15 or 20 years ago.
If you are beginning to research Memory Care OKC and your loved one has long-term care insurance, now is the time to pull out the policy and understand what it actually provides.
Long-Term Care Insurance Is Different From Health Insurance
The first thing to understand is that long-term care insurance was designed for a different purpose than Medicare or traditional health insurance.
Health insurance primarily pays for medical care. Long-term care insurance is designed to help with qualifying long-term care needs, which may include assistance with activities of daily living or supervision related to cognitive impairment depending on the policy.
That distinction can make long-term care insurance particularly relevant for someone with dementia.
A person may not need hospital-level medical treatment, but they may need help dressing, bathing, eating or remaining safe because of cognitive decline.
Those are the types of needs long-term care insurance may be designed to address, subject to the actual policy.
The Policy Controls the Benefit
This is probably the most important thing I can tell families.
Don’t assume all long-term care insurance works the same way.
One policy may have a certain daily or monthly benefit. Another may reimburse expenses up to a limit. There may be a maximum lifetime benefit or a specific benefit period.
The policy may also define what types of care settings qualify.
That’s why I would never tell a family, “Yes, your insurance will pay for Memory Care OKC,” without knowing what the policy actually says and whether the insurer has approved the claim.
The right answer is that it may, and we need to investigate.
What Usually Triggers Benefits?
Many long-term care policies use specific criteria to determine when benefits become payable. That can involve needing assistance with a certain number of activities of daily living or having qualifying cognitive impairment.
Activities of daily living commonly involve things such as bathing, dressing, eating, toileting, transferring and continence, although families should refer to the definitions in their specific policy.
Cognitive impairment can be especially relevant for dementia.
Dad may physically be able to dress himself and walk independently but still require substantial supervision because he wanders or cannot safely make decisions. Depending on the policy, cognitive impairment may be an important path to qualifying for benefits even when the person remains physically capable in many areas.
Again, the insurance company and policy determine whether the requirements have been met.
What Is an Elimination Period?
Families may discover that having an approved long-term care claim doesn’t necessarily mean payments begin immediately.
Many policies include an elimination period. Think of it somewhat like a waiting period that must be satisfied before benefits begin, although the exact rules vary by policy.
That period might be based on a certain number of days, and the way those days are counted can differ.
This matters when planning a move into Memory Care OKC because the family may need enough resources to cover the initial cost before insurance benefits begin.
Ask the insurer specifically how the elimination period works under your policy rather than making assumptions.
How Much Will the Policy Pay?
This is where families sometimes get excited and then realize the policy doesn’t necessarily pay the entire memory care bill.
Suppose Mom’s policy provides a defined monthly benefit. If the memory care community costs more than that amount, the family is responsible for the difference.
That doesn’t make the policy any less valuable.
Even a benefit that covers part of the monthly cost can preserve savings significantly longer.
This is why I like to look at all available resources together. Mom’s Social Security may cover one portion. A pension covers another. Long-term care insurance contributes toward the care expense, and savings cover the remaining gap.
The question isn’t always, “Will insurance pay for everything?”
Sometimes the better question is, “How much longer can Mom’s resources last because insurance is helping?”
Find the Policy Before You Need It
Please don’t wait until discharge day from the hospital to start looking through filing cabinets.
If Mom has dementia and you know she purchased long-term care insurance, find the policy now. Find the insurer’s contact information. Call and ask what benefits are available and what needs to happen to initiate a claim.
You can ask what documentation will be required and whether Memory Care OKC communities need to meet any particular requirements under the policy.
You may also discover that premiums still need to be maintained until certain conditions are met. Don’t stop paying a policy simply because Mom is getting closer to needing care without first understanding the consequences.
A policy someone has paid into for years can be incredibly valuable. You don’t want to accidentally create a problem because nobody understood how it worked.
Ask About Inflation Protection and Benefit Limits
Older long-term care policies can sometimes have features families have forgotten about.
For example, some policies include inflation protection that increases the available benefit over time. A policy purchased years ago may therefore provide a larger benefit today than the original paperwork seems to suggest.
There may also be lifetime maximums or limits on how long benefits are payable.
Those details matter when you’re building a long-term financial plan.
If Mom has a progressive dementia, we aren’t only trying to pay for the first six months of care. We want to understand how her resources may hold up over several years.
Does the Community Have to Submit Documentation?
Possibly.
The insurer may require care plans, assessments, invoices or other documentation. Different carriers and policies have different claim processes.
When touring Memory Care OKC, it can be helpful to ask whether the community regularly works with long-term care insurance claims and what documentation they can provide.
The community does not determine whether Mom qualifies for her insurance benefit, but having a business office familiar with the documentation process can make things easier.
Don’t Let the Insurance Policy Choose the Community
The policy is a financial tool. It shouldn’t be the only reason you choose where Mom lives.
We still need to ask whether the community can meet her needs. Does the environment feel appropriate? Are residents engaged? How does the staff respond to dementia-related behaviors? What happens as care needs increase?
Then we determine how the insurance benefit fits into the cost.
Choosing a poor care environment simply because the financial arrangement looks good is not a bargain.
Make the Call
If you know your loved one has long-term care insurance, one of the best things you can do is contact the carrier and start asking questions.
What is the current benefit amount? What triggers eligibility? Is there an elimination period? How long can benefits last? Does the policy cover assisted living or memory care? What documentation is required to file a claim?
Write the answers down.
At Abundant Life Senior Consulting, I help families compare Memory Care OKC options and understand how different resources may fit into the care plan. When it comes to long-term care insurance, the actual policy and insurer ultimately control the benefits, so we want accurate information rather than assumptions.
That old insurance policy sitting in a filing cabinet may end up being one of the most valuable resources your family has.
Find it before you need it.