Long-Term Healthcare Insurance
Updated: Feb 21, 2019
Many insurance companies are now offering long term care or nursing home policies. Be careful in buying this type of policy. Many such policies do not provide the protection you are most likely to need.
For example, many persons are in nursing homes because they need help with daily living, yet many policies are limited to care that is medically necessary. Pay special attention to the definition of medically necessary in the insurance contract. Also, many policies limit coverage to skilled care and would not cover custodial care.
In shopping for long term care policies, find out whether a given policy guarantees renewability. A policy that can be cancelled by the insurance company after a need arises may be worthless. Indiana law now provides that a long term health care insurance policy cannot be cancelled or terminated on the grounds of age or a decline in health.
Find out whether the company limits rate increases. Some companies attract you with low rates but then raise rates dramatically later. Find out about the company policy on pre-existing conditions. Be aware of the maximum number of days covered. A policy that pays for 365 days of continuous stay will not be renewable after one year of stay in a nursing home.
The Indiana Medicaid office offers a program that allows you to keep more assets and still receive Medicaid if your long term care insurance policy pays toward the costs of your long term care. For every dollar of benefits paid out under an individual’s long term care policy for Medicaid-eligible long term services, that person’s asset limit increases by the same amount.
A person who purchases a qualified policy meeting the maximum benefit criteria will have no asset limit once the policy has paid out the maximum benefit amount. The Indiana Long Term care Program website lists the insurance companies which offer qualified policies and the insurance agents who have completed the required training course and who are marketing qualified polices.
For more information on general insurance issues, contact the Indiana Department of Insurance at 1-800-452-4800.