Long Term Care (“LTC”) Insurance
Assisted living is primarily paid for by individuals’ private or personal funds, such as long-term care insurance or personal assets. Medicare does not cover long-term supports and services. Medicaid may cover some costs, but the rules vary by state. That’s where long-term care insurance comes in. Most LTC insurance policies cover expenses at an accredited assisted living community. Everything is policy-dependent, but most assisted living communities are private pay and can be reimbursed by LTC.
Check Your Policy Carefully
According to AARP, LTC insurance premiums vary widely depending on where you live and how much coverage you want; the average premium is about $2,700 a year but the benefits can vary widely. Whatever you decide to purchase, check the details of your policy carefully. Long-term care insurance is flexible along the continuum of care. For example, it can pay for assisted living, a nursing home, or adult daycare. Still, some LTC policies are designated as facilities-only, meaning they won’t cover in-home assisted living services.
LTC insurance could cover 100% of your assisted living expenses, but that insurance is expensive in and of itself. A general rule of thumb is that your insurance premium shouldn’t exceed 5% of your monthly income. A typical monthly insurance benefit is between $2,000 and $10,000. The median monthly assisted living community cost is $4,000 and varies depending on amenities, location, and level of care required for the individual. In addition, there are often additional fees for related services, such as physical therapy, laundry help, meals, dog walking, and more.
There’s no federal definition for what constitutes assisted living – and laws and regulations vary significantly from state to state. Generally, to be eligible for insurance benefits, a person needs to require help in at least two major activities of daily living, such as bathing, dressing, and eating.
Make Sure Your Assisted Living Community Is Approved by Your Insurance
As a general rule, assisted living communities accept private LTC insurance payments, but LTC insurance companies don’t always approve all assisted living communities. Despite state licenses, an insurance company may deny payment because an assisted living agency or community doesn’t meet its standards. For example, the company could deny coverage because it feels the center is too small or doesn’t have adequate staffing.
Whether there is a connection between state licensing and regulations and insurance coverage depends on the policy requirements. Some states – but not all – require licensed assisted living centers to have registered nurses on staff 24/7. Regulations about training for team members vary, as do laws about facility cleanliness, meal preparation, organized social activities for residents, and more.
In addition, some states have different levels of licensure for assisted living communities.
To find a covered facility, policyholders or their representative can call their insurance company to request a provider inquiry. You can appeal denied claims, but appealing can be a hassle. Start working with a private LTC insurance representative beforehand and then with the appropriate person at the facility to ensure that payments will go through. Most insurers will provide this service free of charge.
Assisted living aims to keep the individual healthy and functional in that environment for as long as possible. Please review your policy before moving into the facility. Compare the initial plan of care and evaluation with the policy, and call your insurance carrier before moving in to discuss that plan.