Long Term Care, who pays?

I recently had an insurance agent phone and talk to me about insurance. Now I am not talking about life insurance, but I am talking about Long Term Care insurance. His point was that if I had to have long term care, who would pay for it and what would that do to my family. Sol, I went and found out some stuff.  First, every jurisdiction is different, and each has its rules about who pays so what I say here about who pays only applies to my area of Canada which is British Columbia. In B.C., some publicly subsidized home and community care services are provided free of charge. For others, the cost is shared between the Ministry of Health and you, the person receiving services. The amount a person is required to pay is called the client rate. The client rate may be based on an individual income or set at a fixed rate, depending on the home and community care service a person receives. If payment of the assessed client rate would cause a person or their family serious financial hardship, they may apply to their health authority for a temporary reduction of their client rate

Long-term care is the provision of personal services and medical care to someone who is cognitively impaired or can’t perform two or more of the six Activities of Daily Living (ADLs).

The ADLs are dressing, bathing, eating, walking, toileting, and transferring (such as moving from a bed to a chair without help). Despite the name, some people need long-term care relatively briefly, such as when they are recovering from surgery or an accident. Others need care for months or years, such as when they have chronic disabilities or illnesses or are declining due to age.

Long-term care services provide 24-hour professional supervision and care in a protective, supportive environment for people who have complex care needs and can no longer be cared for in their own homes or in an assisted living residence. Long-term care services in BC include:

·       standard accommodation.

·       development and maintenance of a care plan.

·       clinical support services (e.g., rehabilitation and social work services) as identified in the care plan.

·       ongoing, planned physical, social and recreational activities (e.g., exercise, music programs, crafts, games);

·       meals, including therapeutic diets prescribed by a physician, and tube feeding.

·       meal replacements and nutrition supplements as specified in the care plan or by a physician.

·       routine laundry service for bed linens, towels, washcloths and all articles of clothing that can be washed without special attention to the laundering process.

·       general hygiene supplies, including but not limited to soap, shampoo, toilet tissue, and special products required for use with facility bathing equipment.

·       routine medical supplies.

·       incontinence management.

·       basic wheelchairs for personal exclusive use.

·       basic cleaning and basic maintenance of wheelchairs; and

·       any other specialized service (e.g., specialized dementia or palliative care) as needed by the client that the long-term care home has been contracted to provide.

If you require long-term  care services, supportive and compassionate care is provided in long-term care homes with the goal of preserving an individual’s comfort, dignity and quality of life as their needs change, and to offer ongoing support for family and friends.

The cost of long-term care services

If a person in BC receive publicly subsidized long-term care services, they will pay a monthly rate of up to 80 percent of their after-tax income towards the cost of secure, supervised housing and care services, subject to a minimum and maximum monthly rate. Your monthly rate is calculated based on your “after-tax income in one of two ways:

1.    If your after-tax income is less than $19,500 per year, your monthly rate is calculated as your after-tax income less $3,900 and divided by 12 (Formula A).

a.     Note: The $3,900 deduction ($325 per month X 12 months) is set to ensure that most clients have at least $325 of income remaining per month after paying their monthly rate.

2.    If your after-tax income is equal to or greater than $19,500 per year, the monthly rate is calculated as your after-tax income multiplied by 80 percent and divided by 12 (Formula B).

The maximum charge for long term care is $3 198.50, adjusted every year on January 1, by the percentage increase, if any, of the consumer price index for the 12-month period ending on July 31 of the previous year.

The minimum charge is the monthly maximum total amount of Old Age Security and Guaranteed Income Supplement to which a person is entitled under the Old Age Security Act (Canada) as of July 1 of the previous year, minus $325, adjusted every year on January 1.

So, in BC, if you have an income of over $19,500 you will pay for your own long-term care with the government taking 80% of your income after taxes. If you earn less than $19,500 you will give the government, your Old Age Security, and your Guaranteed Income Supplement but you will keep $325 a month for spending.

No matter where one lives long-term care is expensive and you should compare all the options and the rules available to you and develop a plan to pay for long-term care.