Long-term care isn't just for the elderly, a state official said Monday.
Kathi Skoglund, with the Department of Social Services, told of a younger man who suffered an unexpected condition requiring lengthy, intensive treatment.
"He was 41 years old with Alzheimer's and had children in middle school," Skoglund said. "He never thought he would need long-term care, and he didn't carry long-term care insurance."
Skoglund spoke Monday at the Vermillion city library about the South Dakota Long-Term Care Partnership Program, administered by the Department of Social Services and Division of Insurance. The program provides an alternative to spending down or transferring assets by forming a partnership between Medicaid and private long-term care insurers.
Long-term care (LTC) insurance can be purchased at any age, Skoglund said. "The average age for buying long-term care insurance is 57 or 58, but people have purchased it in their 30s," she said.
In fact, long-term care needs to be purchased ahead of a health crisis, Skoglund said.
"People ask, 'Should I wait until I am sick?'" she said. "That's like waiting until you hit a deer with your car and then trying to buy insurance to cover it."
Long-term care can prove quite expensive, Skoglund said. In South Dakota, the average cost exceeds $58,750 per year in a nursing home or $80 to $100 per day in assisted living.
Figuring an average stay of 2.5 years for South Dakota, the cost of a nursing home comes to $147,000, Skoglund said. Including home care, assisted living and other arrangements, long-term care can reach six years.
Because of rising costs, Skoglund advised looking at the inflation factor when purchasing long-term care insurance.
"Some say long-term care insurance is expensive, but so is long-term care," she said.
Long-term care can be provided in a variety of settings, with only 18 percent of LTC received in nursing homes, Skoglund said. "In fact, 80 percent of people receive their services at home," she said.
In South Dakota, 34 facilities provide day services that care for the patient and provide relief for caregivers, Skoglund said.
Long-term care is needed when a licensed health care provider certifies that an individual cannot meet personal needs for at least 90 days, Skoglund. The person either suffers from a severe cognitive impairment, such as Alzheimer's, or is unable to perform at least two of six activities of daily living — bathing, toileting, dressing, eating, continence and transferring from a bed to a chair.
"Just think of those six activities," she said. "We perform most of them in the first 30 to 45 minutes that we are awake."
The statistics show a growing need for long-term care, even at younger ages, she said. Forty percent of those who need LTC are under 65.
About two-thirds of all Americans will likely need some type of supportive services after age 65. Approximately 40 percent of those 65 and older will eventually need long-term care in a nursing home or assisted-living facility for a stay of more than two years.
Many people mistakenly believe health and disability insurance pay for long-term care, Skoglund said.
Medicare will pay for care in a nursing home only when certain conditions are met, she said. Even then, the recipient is only fully covered for 20 days. In certain situations, some people qualify for partial payment up to 100 days.
That's where long-term care insurance provides asset protection, Skoglund said. South Dakotans can purchase the insurance from a variety of sources, but a number of companies have met the criteria to qualify for the LTC Partnership program, she said.
Some people may opt not to purchase long-term care, while others may like their current coverage, Skoglund said.
"If people have already purchased long-term care insurance, great. They can keep what they have," she said.
Partnership policies are tax-qualified plans under federal law. They provide inflation protection benefits for purchasers.
Once private insurance benefits are used, special Medicaid eligibility rules are applied if additional coverage is necessary.
Long-term care can be provided in a variety of places, including a person's home, an assisted-living facility or a nursing home. Some partnership policies cover home and community-based services.
Medicaid regulations have tightened and now look back 60 months in the liquidation of assets, Skoglund said. Medicaid also has strict income and asset restrictions, and very strict medical and financial guidelines, she added.
"A Partnership policy carries a Medicaid asset protection feature," she said. "For every dollar that a Partnership policy pays out in benefits, a dollar of assets can be protected from the LTC Medicaid resource limit."
When determining LTC Medicaid eligibility, any assets up to the amount the Partnership policy paid in benefits will be disregarded, she said.
Skoglund dispelled a number of myths about long-term care insurance. A person does not need to be at least 65, first hospitalized or out of work, she said.
Certain companies have met criteria for the Partnership program, but other long-term care policies also provide protection, Skoglund said.
"You need enough coverage to protect your assets," she said.
Skoglund advised a number of questions when choosing an insurance company.
"Has the company ever raised its rates? If so, how many times and what percentages?" she asked. "How many assets does the company have? Look for $1 billion-plus. And what letter grade does the company get from A.M. Best (www.ambest.com)? Look for ratings in the A's."
More people choosing long-term care insurance not only protect their assets but also reduce the Medicaid burden for the state, Skoglund said. Medicaid pays for 58 percent of the nursing home and assisted-living care in South Dakota, she said.
Of the long-term care dollars in South Dakota, 43 percent goes to home care, 33 percent to assisted living and 22 percent to nursing homes, she added.
After Monday's session, Tom and Diane Zak of Vermillion said they attended for their own personal interest. However, Diane Zak was also interested as the human resources director for the University of South Dakota in Vermillion.
"The partnership plan is new to me. It's only about two years old," she said.
Skoglund plans to provide more LTC informational sessions this fall in Vermillion, at both USD and in the community. However, she will schedule more sessions if requested.
"We want people to ask questions about long-term care insurance, like where can they get it and what are their options," she said. "We also want to clear up misconceptions."
Most importantly, Skoglund wants South Dakotans to look at their long-range needs.
"We want people to plan for the future," she said. "We try to provide an education to people and provide them with options for their long-term care plans."
For more information on the Partnership program, visit online at http://ltcpartnership.sd.gov.