During the COVID-19 pandemic, long-term care facilities ( LTC) have been hit the hardest. More than one-third of all COVID-19 deaths in California coming from long-term care residents and staff. There are a variety of factors at play such as the high turnover and constant flux of long-term care staffing as well as limited facility funding with a heavy reliance on Medi-Cal.
While there is plenty to be done, some legislation has already been enacted to protect LTC residents and staff. In May of 2020, the Department of Health mandated that all nursing home staff be tested for COVID-19 on a weekly basis. With nearly half of all Long-Term Care facilities recording COVID-19 infections by staff, frequent testing of staff is key to prevention. In addition, as of January 1st, 2021, all skilled nursing facilities are now required to report communicable-disease-related deaths within 24 hours and are also required to have a full-time infection preventionist on hand.
Long-term care funding is the big elephant in the room and is not adequately addressed by the government and with and only 2 % of Americans are long-term care insurance policyholders. About 70% of people aged 65 will need some form of long-term care in their lifetime, 20% will need it for more than 5 years while the average long-term care need is for 3 years. The average cost in California for assisted living in 2020 was $60,000 a year while a semi-private nursing home was about $110,000 a year. Even with these sky-high costs, the average nursing home operates at a measly 1.1% profit margin, partly due to a heavy reliance on funding from Medi-Cal, the state’s Medicaid. Medi-Cal coverage is limited to people below the Federal Poverty Level who also have less than $2,000 in assets per person, $3,000 per couple.
The question is, how will you pay for your long-term care? There are a few options to choose from such as standalone long-term care, life insurance with a long-term care rider (whole life, universal life), or, if you have no assets and your income is below the Federal Poverty Level (including Social Security income), you may qualify for Medi-Cal alongside Medicare. Life insurance with a long-term care rider can be convenient but also generally costs more than standalone long-term care. It is best to apply for long-term care in your 50s but the younger you are, the lower your rates assuming your health is the same. Medical underwriting is required and many older Americans do not qualify for long-term care insurance as they have medical pre-existing conditions.
If you are interested in reviewing your long-term care options, let us at Solid Health Insurance Services assist you in navigating through your options. Please contact us at info@solidhealthinsurance.com or at 310-909-6135 for us to better assist you.