Title - Frequently Asked Questions Title - Frequently Asked Questions

What is the "Own Your Future" Long-Term Care Awareness campaign?
The "Own Your Future" Long-Term Care Awareness campaign encourages residents to take an active role in planning ahead for their future long-term care needs. The State of South Dakota partnered with the U.S. Department of Health and Human Services (HHS); encouraging citizens to start planning and preparing for their long-term care needs.

South Dakota was chosen along with five other states (Georgia, Massachusetts, Michigan, Nebraska, and Texas) to participate in the third phase of HHS' "Own Your Future" campaign, an education and outreach effort designed to promote long-term care planning among state residents. These six states were selected from 16 applications received in response to HHS' invitation for proposals.

When does the campaign start and when does it finish?
The campaign began on November 21, 2006, with Governor Rounds' press conference. It ended on January 31, 2007.

However, in the years ahead, the increased public awareness brought by the campaign should encourage all individuals to include long-term care awareness and planning in the individual's overall pre-retirement planning. This is an ongoing effort among many other states with help from the federal government.

What are the some of the activities that happened during this campaign?

Why is this important?
The U.S. Census Bureau estimates that the number of elderly people in the United States will double between 2000 and 2030. Nationally, by 2050, 21.5 percent of the population will be over 65. By the year 2025, 260 billion will be spent on long-term care for the elderly (up from 102 billion in 2000). Today, Medicaid currently pays for approximately 35 percent of formal long-term care services with self-pay payments representing 33 percent and Medicare representing 25 percent. Private insurance and other sources together make up only 7 percent*. According to an AARP report (2006), less than one in five South Dakota AARP members are confident they could afford the cost of care in a nursing home or assisted living facility for one year.

Awareness on long-term care needs and services is important because:
  • Many individuals underestimate both the risks and costs of long-term care.
  • In the future, long-term care demands may exceed Medicaid resources.
  • Individuals may learn that long-term planning options are possible for them.
  • Taking action now may enable an individual to protect family income and savings in the future.
    • *Source: Testimony of Michael O'Grady, Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, U.S. Senate Special Committee on Aging (June 22, 2004)
What is long-term care and should I buy long-term care insurance?
Long-term care is the kind of help you need if you are unable to care for yourself because of prolong illness or disability. It can range from help with daily activities at home, such as bathing and dressing, to skilled nursing care in a nursing home.

Not everyone should buy a long-term care insurance policy. For some, a long-term care policy is an affordable and attractive form of insurance. Buying a long-term care policy should not cause financial hardship and make you forego other financial needs. Each person should carefully examine his or her needs and resources to decide whether long-term care insurance is appropriate. It is also a good idea to discuss such a purchase with your family.

Source: South Dakota Division of Insurance

Will Medicare cover all the nursing home costs for seniors and the disabled?
No. Medicare, a federal health insurance program for disabled adults and adults age 65 and older, has specific rules that apply for payment of nursing home care. First, Medicare requires a 3-day hospital stay prior to transfer to a nursing home and after admission to the nursing facility, services provided in the nursing home must relate to the illness or injury that cause the hospitalization. After admission, Medicare coverage for nursing home care terminates once an individual's needs change from skilled care to custodial care. Finally, Medicare coverage is limited to 100 days of care per benefit period. A Medicare's beneficiary's average-length-stay in a nursing facility is about 31 days per benefit period as a result of these rules. Medicare does not pay for nursing home custodial care over an extended period of time.

What financing options are available to finance long-term care?
  • Medicaid, a public medical assistance program for people with low-income and limited financial resources.
  • Medicare, a federal health insurance program for disabled adults and adults age 65 and older.
  • A private health insurance or retirement health plan.
  • An individual's own income, savings or sale of other assets.
  • Relying on children or relative to provide care on an informal basis.

What should I consider before buying a long-term insurance policy?
While there are a number of different things that can be looked at and evaluated as to what is the best policy to buy, some of the things that should be considered are:

  • What is the maximum benefit of the policy (2 years, five years, or lifetime)?
  • How many days do I have to be in the nursing home before the policy starts paying?
  • Is the policy tax qualified or not?
  • Does the policy provide for home health care or adult day care?
    Source: South Dakota Division of Insurance

If I buy a long-term care insurance policy, can the company increase the policy's premium before I need it?
There have been a number of measures taken to discourage long-term care insurance companies from under-pricing long-term care insurance policies. One of those new requirements is for companies to disclose to prospective buyers their history of premium increases. This is one of the things you should look at in deciding which policy to buy. Another consideration is how financially stable the company is. Finally, a person needs to decide what product options best suit his/her needs and select the policy designed to provide the level of protection needed. The cheapest policy is not necessarily the best policy.

Source: South Dakota Division of Insurance

Are premiums for a long-term care insurance policy expensive?
The cost for long-term care insurance varies by the age, marital and health status of the applicant, as well as the level of coverage purchased and even the state of residence, according to Jesse Slome, reporting to the American Association for Long-Term Care Insurance. Long-term care insurance protection for a typical 55-year-old in good health costs $772-per-year, according to the 2006 Long-Term Insurance Price Index.

Source: American Association for Long-Term Care Insurance, www.aaltci.org

Who can I call if I have questions or concerns about "Own Your Future" or Long-Term Care Services or Insurance?