Understanding Elimination Periods in Long-Term Care Insurance

When considering long-term care insurance policies, one crucial feature to understand is the elimination period. This is the waiting period before your insurance policy begins to pay benefits after you qualify for care. Choosing the right elimination period can significantly impact both your coverage and premium costs. This guide explores why a 90-day elimination period is often preferred, how it aligns with Medicare services, and the variations across different insurance providers.

What is an Elimination Period?

The elimination period is the number of days you must receive covered care services before your long-term care insurance policy starts paying benefits. It functions similarly to a deductible but is measured in time rather than a dollar amount.

Common Elimination Period Options

• 0 Days
• 30 Days
• 60 Days
• 90 Days
• 180 Days

The elimination period you choose affects your premium—the longer the elimination period, the lower your premium, and vice versa.

Why a 90-Day Elimination Period is Often Preferred

Alignment with Medicare Services

One of the primary reasons a 90-day elimination period is popular is its alignment with Medicare coverage for skilled nursing facility care.

• Medicare Coverage: Medicare may cover up to 100 days of skilled nursing facility care under certain conditions following a hospital stay.

• Coverage Breakdown:

  • Days 1-20: Fully covered by Medicare.
  • Days 21-100: Covered except for a daily coinsurance amount.
• Implication: By selecting a 90-day elimination period, your long-term care insurance benefits kick in after Medicare coverage diminishes, minimizing overlap and out-of-pocket expenses.

According to the Administration for Community Living, someone turning age 65 today has almost a 70% chance of needing some type of long-term care services in their lifetime, making proper coverage planning essential.

Personal Story: Real-Life Application

Consider the experience of my mom, who underwent cancer surgery. Upon returning home, she required assistance with bandage changes and recovery support. Medicare provided for a home health aide to visit, but the services were only for short periods and limited duration.

• Short-Term Needs: Immediate post-surgery care was covered by Medicare for a limited time.
• Transition to Long-Term Needs: If her recovery had required extended care beyond Medicare's coverage, a long-term care insurance policy with a 90-day elimination period would have begun paying benefits precisely when needed.

Variations in Elimination Periods Across Insurance Providers

While the 90-day elimination period is common, policies vary by provider, especially among hybrid and traditional plans.

Hybrid Plans and Elimination Periods

Lincoln Financial Group

• Lincoln's MoneyGuard policies have no elimination period for any care setting.
• Advantage: Benefits are payable from day one, providing immediate coverage without waiting.

Brighthouse Financial and Securian Financial

• 90-Day Elimination Period: Both Brighthouse's SmartCare and Securian's SecureCare have a standard 90-day elimination period for all care settings.
• Consideration: Aligns with typical elimination periods but lacks flexibility to adjust the waiting period.

Compare Side-by-Side Long-Term Care Plans in 3 Minutes

Nationwide CareMatters II

• Unique Structure: Nationwide CareMatters II effectively offers a 0-day elimination period after meeting certain conditions.

• How It Works:

  • You must satisfy 90 calendar days of qualifying for benefits (not necessarily consecutive care days).
  • Once met, the policy pays benefits retroactively back to day one.
• Benefit: Provides immediate financial support after the waiting period without the standard elimination period's financial gap.

OneAmerica Asset Care

• Split Elimination Period: OneAmerica Asset Care:

  • 30 Days for Home Care Services.
  • 60 Days for Facility-Based Care.
• Advantage: Shorter elimination periods reduce out-of-pocket expenses before benefits begin.

Short-Term Care Plans

Aetna Recovery Care

• 0-Day Elimination Period: Aetna Recovery Care policies are typically built with no elimination period.

• Coverage Details:

  • Provides coverage for up to 360 days in a facility.
  • Offers benefits up to $400 per day, totaling a potential pool of $144,000.
• Ideal For: Those seeking immediate coverage with shorter benefit periods and lower premiums.

Factors to Consider When Choosing an Elimination Period

Financial Readiness

• Out-of-Pocket Costs: Longer elimination periods mean you'll pay more out-of-pocket before benefits begin.
• Savings and Assets: Assess your ability to cover expenses during the elimination period.

Coordination with Other Coverage

• Medicare Coordination: Aligning your elimination period with Medicare's coverage can optimize benefits.
• Other Insurance Policies: Consider any additional coverage that may affect your need for shorter elimination periods.

Care Expectations

• Immediate Need Likelihood: If family history or health conditions suggest a higher chance of sudden care needs, a shorter elimination period may be preferable.
• Care Setting Preferences: Determine whether you anticipate needing home care, facility care, or both.

Pros and Cons of Different Elimination Periods

0-Day Elimination Period

Pros:

• Immediate access to benefits.
• No waiting period during which you pay out-of-pocket.

Cons:

• Higher premiums due to increased risk to the insurer.

90-Day Elimination Period

Pros:

• Lower premiums compared to shorter elimination periods.
• Aligns well with Medicare coverage periods.

Cons:

• Requires out-of-pocket payment for care during the elimination period.

Conclusion

Choosing the right elimination period is a critical decision that balances your financial capacity with your anticipated care needs. Understanding how different policies handle elimination periods can help you select the coverage that best fits your situation.

Key Takeaways:

• 90-Day Elimination Period: Offers a cost-effective balance by coordinating with Medicare coverage, minimizing gaps.

• Provider Variations:

  • Lincoln MoneyGuard: No elimination period.
  • Nationwide CareMatters II: Effective 0-day elimination after 90 days, paying retroactively.
  • OneAmerica Asset Care: Shorter elimination periods for home and facility care.
  • Aetna Recovery Care: Immediate coverage with no elimination period.
• Personal Considerations: Evaluate your health, financial readiness, and care expectations when selecting an elimination period.

We're here to assist you in navigating these choices. Contact us today to explore policy options and find the best fit for your long-term care planning needs.

Note: Policy features and availability may vary by insurer and state. Always consult with a licensed insurance professional for personalized advice.