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Long-term care (LTC) insurance provides a solution for covering the costs of nursing homes, assisted living, and in-home care. However, due to rising premiums and strict underwriting, many individuals are seeking alternative insurance products to ensure they have financial protection for future care needs. Below, we explore some of the most viable alternatives to LTC insurance.

Hybrid Long-Term Care Insurance Policies

Hybrid policies combine LTC benefits with life insurance or annuities. These policies provide a death benefit if the beneficiary does not fully use the LTC benefits. This makes them a good option for those concerned about losing money on unused coverage.

Life Insurance with Long-Term Care Riders: These policies allow policyholders to use part of their death benefit to cover long-term care expenses.

Annuities with Long-Term Care Benefits: Some annuities offer enhanced payouts if funds are used for qualified long-term care expenses.

Short-Term Care Insurance

Short-term care (STC) insurance provides coverage for a limited time period. In most cases, up to one year. These policies are more affordable and have less strict underwriting than traditional LTC insurance. This makes them a good option for those who can’t afford a LTC policy. They are also an option for individuals who may not qualify for LTC coverage.

Critical Illness Insurance

Critical illness insurance pays out a lump sum upon the diagnosis of specific serious medical conditions. Policies cover conditions such as cancer, stroke, or heart attack. While critical illness insurance does not cover all long-term care costs, it can provide financial relief to help with medical expenses or caregiving services.

Learn more about critical illness insurance from Physicians Mutual

Life Insurance with Accelerated Death Benefits (ADB)

Some life insurance policies include an ADB rider. This rider allows policyholders to access a portion of their death benefit early if they develop a chronic or terminal illness. The ADB provides financial support for long-term care expenses without the need for a separate LTC policy.

Health Savings Accounts (HSAs)

HSAs allow individuals with high-deductible health plans to save money tax-free for medical expenses, including certain long-term care services. These funds can be a valuable resource to help cover the cost for care.

Please note: Although individuals can’t contribute to an HSA once they’re enrolled in Medicare, beneficiaries can still use funds already in an HSA to pay for qualified medical expenses.

Reverse Mortgages

A reverse mortgage enables homeowners aged 62 and older to convert home equity into cash, which they can use for long-term care expenses. While this option provides cash for expenses, it reduces home equity and can impact heirs’ inheritance.

Medicaid

For those who meet income and asset requirements, Medicaid provides comprehensive long-term care coverage, including nursing home care and home-based services. State-specific programs may also offer additional resources for long-term care support.

Choosing the best alternative

The best alternative to traditional LTC insurance depends on an individual’s financial situation, health, and long-term care needs. Consulting with a financial advisor or insurance professional can help individuals evaluate their options and develop a plan to ensure their coverage needs are met.

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Although traditional LTC insurance is a viable option for some, alternative insurance products provide flexibility and affordability. By exploring various coverage options and financial tools, individuals can secure financial protection and peace of mind for their long-term care needs.

The differences between Medicare and Medicaid

When we explain the differences between Medicare and Medicaid, we have to start with the fact that these are two very different programs.

Both programs provide an important service to the group that it serves.  Each of these programs receives funding and is run by different parts of the government.

To sum it up:

1. Medicare is a program put in place by the federal government to provide health coverage for individuals 65 and over as well as qualified individuals with disabilities.
2. Medicaid is a program that is provided by both state and federal governments for qualified individuals who have limited income and little financial means.

Medicare and Medicaid Dual Eligible

Although Medicare and Medicaid sound very much alike, they are different programs. Their similarities are that both help people secure healthcare and both are federally funded. Some people are qualified to receive benefits from both Medicare and Medicaid and can choose to do so. This group of beneficiaries is considered to have dual eligibility – Medicare and Medicaid dual eligible.

Medicare vs Medicaid

Briefly, here are some of the major differences between the two programs.

Medicare is a federally funded health program that provides insurance for people who are 65 and older at a reduced cost. Some people who are under 65 but have certain disabilities may qualify as well. Medicare is offered by the federal government. The cost of Medicare will depend on the coverage the beneficiary chooses and may include premiums, down payments, copays, and co-insurance.

Medicaid is a joint federal and state funded health insurance program. It seeks to provide health care and resources to vulnerable populations such as those on limited income, pregnant people, and children. Medicaid is offered by state governments and therefore the cost to the beneficiaries will vary by location.

How to Get Medicare and Medicaid

In order to receive benefits from both Medicare and Medicaid, a beneficiary must qualify for both of these programs. For instance, someone who is over 65 years old and is also on a lower or limited income may qualify to receive both Medicare and Medicaid. The two programs may be able to work together to cover the majority of health costs. Some specific plans exist for those people that are dual eligible as well, such as the Dual Special Needs Plan (D-SNP). Because Medicaid requirements are dependent on location and state governments, however, Medicaid eligibility will vary.

There are beneficiaries that are considered part duals and full duals. Part duals are called this because Medicaid pays for some of the expenses that they accumulate under their Medicare plan. It may also pay for some cost-sharing amounts categorized by Medicare, like deductibles or copayments. Part duals can include people who are disabled and working, or have an income level above the state poverty line but below 125% of federal poverty level.

Full duals, on the other hand, are entitled to Medicaid coverage for services that Medicare does not cover, such as longer-term services and supports. Duals with lower income and assets will fall under full Medicaid benefits as well as their Medicare eligibility. Because this group of people can account for much of the federal and state spending in these programs, they are studied by researchers and policymakers to determine budgets and planning.

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A Brief History of Medicare and Medicaid

Groom yourself for trivia night with this brief history of Medicare and Medicaid.  Original Medicare, or what is known as Parts A and B (hospital and medical coverage), is a relatively new feature in the United States. It was signed into law on July 30, 1965, by then-President Lyndon B. Johnson. Of course, changes have been made since then. In 1972, Medicare was expanded to cover people with disabilities, people with end-stage disease requiring dialysis or kidney transplants, and people who select Medicare at age 65 and older. Additionally, more benefits, such as prescription drug benefits have been added.

At first, Medicaid only offered benefits to a certain group of people: those receiving cash assistance from the federal government. Medicaid has changed since then as well, as a much larger group is covered now, including: low-income families, pregnant women, people with disabilities regardless of age, and those who need long-term care. Under these newer laws, states have the responsibility and ability to change their Medicaid programs to best cover their vulnerable populations, thus ensuring the best use of the federal and tax dollars that cover Medicaid.

Y2K Changes

In 2003, the largest change was made to the Medicare and Medicaid program in over 38 years: The Medicare Prescription Drug Improvement and Modernization Act. Medicare Advantage Plans or Medicare Part C became available under the MMA. This act also expanded Medicare to include an optional prescription drug benefit, known as Part D. Medicare Part D went into effect in 2006.

Since 2006, the largest change to Medicare and Medicaid has come with the Affordable Care Act (ACA).    ACA  created the health insurance marketplace and subsidized health insurance for millions of Americans. As a result, Medicare and Medicaid have been able to better coordinate how they cover their beneficiaries and provide quality health care services.

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Medicare and Medicaid Dual Eligible Plans

Medicare and Medicaid Dual Eligible Plans:  Evercare (United HealthCare) is the only Medicare/Medicaid “Dual Eligible” plan available in the Connecticut market today. WellCare was offering a dual eligible plan but it is currently not being sold due to CMS restrictions.

The Evercare plan offers some benefits to Dual Eligible people that they would not have otherwise. It helps them cut down on potential out of pocket costs associated with visiting doctors whom do not accept Medicaid. The plan also provides a small benefit ($180 a year)toward over the counter drugs which can be purchased through a catalog. Finally, the plan offers 12 round trip rides per you to the doctor which can be useful for those who have trouble making it to their doctors appointments.

Evercare carries no premium for full qualifiers and can be added or dropped at any time. Medicare enrollment time frames are not applicable other than the need for the plan to start the first of the month after the member applies.