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Long-Term Care Insurance

New Options for Seniors to Get Care at Home

For relatively healthy seniors who don't want to live in a retirement community, continuing care at home can be key to maintaining independence.

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As Americans age and the need for long-term care grows, the options for providing it continue to evolve. An increasingly available choice: "continuing care at home" programs for seniors who want to stay in their own homes.

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These programs typically charge an up-front fee and monthly fees to cover in-home assistance you need with dressing, bathing, housekeeping and other tasks. Some also provide transportation, educational programs and social events with other program members. And depending on the type of contract you select, your fees may also cover the costs if you need to move to an assisted-living facility or nursing home.

For relatively healthy seniors who don't want to live in a retirement community, continuing care at home can be key to maintaining independence. But these programs aren't for everyone. People who have serious chronic conditions may not be accepted. And since regulation of continuing care at home varies widely by state, there's a heavy burden on consumers to check out the program's financial strength. After all, if you sign on as a relatively young and healthy retiree, you’d like to think the program will be there 20 or 30 years down the road when you may need it most.

Although continuing-care-at-home programs have been around since the 1990s, the concept has caught on in just the past few years. The number has nearly doubled over the past several years, to roughly 30, according to investment bank Ziegler, and there are a number of new programs in development. After the financial crisis, a stagnant housing market and volatile investments made many seniors reluctant to sell their homes and pay the big up-front fees required to move into a continuing-care retirement community (CCRC), says Peter Notarstefano, director of home and community-based services at LeadingAge, an industry group representing aging-services providers. So many CCRCs have launched continuing-care-at-home programs--sometimes also called "CCRCs without walls."

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To discover if any programs are near you, contact your Area Agency on Aging. Find your local agency at www.eldercare.gov.

The application process includes a review of your health, finances and home. The programs generally reject anyone with a diagnosis of dementia or a progressive neurological disorder. They'll also check to see if you have sufficient income and assets to pay the fees without suffering financial hardship and that your home is age-friendly. If not, they may suggest modifications such as adding grab bars in the bathrooms.

The Costs of Care

The programs often have a daunting array of pricing options. You’ll need to decide what type of care you want the program to pay for, whether it's just in-home care or also care in a facility, should you need it. (Even if the program doesn't have a brick-and-mortar facility, it will generally offer coverage in a facility of your choice.) In some cases, you'll be asked to select daily and lifetime coverage limits. If you choose a coverage limit of $100 per day, for example, you may face big out-of-pocket costs if you wind up needing round-the-clock in-home care or care in a facility. In other cases, you can choose a comprehensive plan that will cover 100% of your costs, even if you need 24-hour care at home or move into a nursing home.

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Typically, there's an entry fee (which may be based on your age at enrollment) and monthly fees based on your level of coverage. In the Westlake, Ohio-based Kendal at Home program, for example, a 75-year-old who wants coverage of in-home and facility care would pay an entry fee of roughly $50,000 and monthly fees of about $650, says Lynne Giacobbe, executive director. Ask if the fees can go up, and by how much, and whether any part of the entrance fee is refundable. (A portion of nonrefundable fees may be tax-deductible as a prepaid medical expense.)

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Make sure you understand what services are included in those fees, and what might cost you extra. Typically, all members are assigned a "care coordinator" who works with you while you're healthy to meet your wellness goals and coordinates caregivers to help you get back on your feet when you have health problems. The care is generally provided by home health aides, who can help with bathing, grocery shopping, meal preparation and other daily tasks. But you may be charged extra if you need more specialized services such as physical therapy. You may also have to pay extra for educational workshops and transportation to non-medically necessary appointments.

The value you get from the program, of course, depends partly on your health. Sally Strauss, age 71, of Westlake, Ohio, was healthy when she enrolled in Kendal at Home in 2011. Within months, she had to have open-heart surgery and needed many weeks of care at home. Without the program, "I don't know what I would have done," Strauss says.

Gerrie Schmidt, however, hasn’t needed any in-home care since signing up with Plymouth Meeting, Pa.-based Friends LifeCare eight years ago. But the retired marketing executive has attended workshops on brain health and mindfulness meditation near her home in Philadelphia and made some new friends. "There really is a sense of community in addition to the services they provide," says Schmidt, age 70.

If you already have long-term-care insurance, a gold-plated continuing-care-at-home program "may be a belt-and-suspenders strategy," says James Ciprich, a financial planner at RegentAtlantic, in Morristown, N.J. But it may make sense to add a stripped-down continuing-care-at-home contract that provides only care coordination.

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Although continuing-care-at-home programs offer something akin to insurance, they're not always regulated by state insurance departments or subject to strict financial standards. Ask to see a copy of audited financial statements, and ask a financial adviser or accountant to help you evaluate them. Ask how many members are in the program. If it's a very low number--perhaps less than 100--just a handful of people needing long-term care could hurt the financial viability of the program, Ciprich says.

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Generally, the programs work to keep members at home for as long as they wish, although conditions such as advanced dementia may require a move to a facility. Since the goal is to "age in place," you may want to ask how many program members wind up in facilities. At Friends LifeCare, for example, just 33 of 2,500 members are in nursing homes or assisted-living facilities, says president Carol Barbour.