WHAT IS THE COST OF A NURSING HOME STAY?
According to Bailey the average private-pay rates in the Boston area can range from $150-$200 daily.

WHEN DOES MASSHEALTH OR MEDICARE PAY FOR NURSING HOME STAYS?
Medicare pays for the first 20 days of skilled nursing home care as long as there is what they define as a "skilled need," not custodial care. For days 21-100, Medicare will pay up to a certain amount ($96/day in 1999) for medically necessary care. After 100 days Medicare will not pay for nursing home costs. You may purchase Medigap policies that offer greater levels of coverage for nursing home stays.

MassHealth pays for nursing home coverage for individuals over 65 who have assets of no more than $2000 (this description is very simplified). If there is no surviving spouse, the individual’s home may be sold by the government to pay for the cost of nursing home care. For a couple, new regulations allow the healthy spouse to keep at least $81,960 of the joint assets and their primary residence. The rest of the assets must be spent down to $2000 before MassHealth will pay for a nursing home.

WHO SHOULD BUY A LTCI POLICY?
Pham suggests people with at least $150,000-$200,000 in assets should buy a policy costs no more than 7-10% of their income. According to Bailey couples with liquid assets from $100,000-$200,000 should definitely have a policy. Widows, widowers, single individuals and couples with assets greater than $500,000 may choose to not have a policy. The reason is that widows, widowers and single people do not have to protect the assets of the surviving spouse and can therefore spend down their assets to qualify for MassHealth. Couples with assets greater than $500,000 can usually afford to use their own money to pay for nursing home care. Still, many people want to leave their children an inheritance and so they buy LTCI rather than risk losing their assets.

HOW MUCH DOES LTCI COST?
As with any insurance, the premiums increase as you get older and the benefits vary from policy to policy. LTCI comes with level premiums, which means that whatever price you pay stays the same for the life of the policy. Pham states in his article, "In a recent review of 14,100 premium quotes from 20 companies, Weiss Ratings Inc., one of several insurance rating firms in the country, offered these comparative prices: At age 50, the insured would pay $444 for a comprehensive policy covering nursing home care, community-based care, and home health care with a four-year benefit period, a 60-day deductible, and a $100 per day benefit. At age 60, the same coverage would cost $771. By contrast, at age 70, the premium would be $1,699."

A portion of the premiums are tax deductible as a medical expense if all medical expenses equal at least 7.5% of the household’s Adjusted Gross Income. For 1999, qualified long-term care premiums may be deducted up to the following amounts:

Age 40 or less - $210 Age 41 to 50 - $380 Age 51 to 60 - $770 Age 61 to 70 - $2,050 Age 71 and above - $2,570

CAN LTCI PROTECT MY HOME?
The state may lay claim to the individual’s home while they are alive and living in a nursing home or after the person has passed away. Unless the person getting nursing home coverage through Mass-Health has one of the following relations, the individual’s home may be subject to lien: a surviving spouse, a disabled child (may be an adult), a child under 18, a caretaker child, or a part-owner sibling who lived in the house for a year prior to the move to the nursing home. In Massachusetts people can keep their home if they have a LTCI policy that satisfies the minimum state requirement, which is currently nursing home coverage of $90/day for two years. If someone has a home that has been in the family for generations or they simply want to leave their home to their children, they may choose to buy the lowest cost insurance that satisfies this requirement

WHAT SHOULD I LOOK FOR IN LTCI?
The most important component is inflation protection. This allows the benefit to increase every year, usually 5%, to keep up with the rate of inflation. Some policies offer a home health care option that allows people to stay in the home as long as possible. Plans usually have a waiting period of 20 or 100 days before receiving coverage. Currently Massachusetts allows a maximum of a 1-year waiting period for insurance policies, but people should be discouraged from buying these types of policies because of the obvious financial gamble. Non-forfeiture protection allows you to recover some portion of your premiums if you cancel your policy. Finally, make sure the policy has a reasonable benefit trigger. Some policies allow consumers to begin collecting benefits when a physician certifies that long-term care is medically necessary. Others require that you prove you are unable to perform certain function like bathing, dressing and eating. Try to find a policy with the least barriers to benefits.

WHAT IF I TRANSFER MY ASSETS TO MY CHILDREN NOW IN ORDER TO QUALIFY FOR MASSHEALTH IN THE FUTURE?
When it comes to any type of financial planning please consult a lawyer that specializes in elder law. Some people put another person like their adult child on the house’s title in order to deter MassHealth from selling their home. The interested party should warn these people that if the other person on the title goes through a divorce or has credit problems, their home might be subject to sale. Also, when a person applies to MassHealth for long-term care, MassHealth will look at the person’s financial transactions as far back as 5 years. If in that time there was ANY transfer or sale of assets where the applicant was not "fairly" compensated, MassHealth will add up the estimated worth of those assets that were transferred. It will then use an estimate of the average cost per day of a nursing home, divide this into the amount of money transferred, and decline paying for the nursing facility until those days pass. Nobody can predict when he or she will need nursing home care so the transfer or sale of assets is a very risky.

WHERE DO I GET MORE INFO?
Call the CRC for copies of the original articles that include other resources on long-term care insurance.

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