§ 7.2 Who Pays for Long-term Care Expenses?

• Library: Elder Law (OSBar) (2017 Ed.)

§ 7.2 WHO PAYS FOR LONG-TERM CARE EXPENSES?

As discussed in § 7.1, most clients use a combination of private resources and public benefits to pay for long-term care expenses. See § 7.2-1 to § 7.3-5(f) for discussions of Medicare benefits, long-term care insurance, private pay, and Medicaid benefits.

In 2016, long-term care expenses in Oregon were being paid in the following percentages:

Payer Source	Percent
Medicare	25.87%
Long-Term Care Insurance	10.68%
Private	14.82%
Medicaid	48.64%
Total	100.00%

Thus, most clients faced with long-term care expenses will be paying privately or will seek assistance from the Medicaid program. Medicare will help a few clients, and the lawyer should always review and discuss this option with clients. Long-term care insurance can also help. Nevertheless, the Medicaid program is the single most important program to consider and review when clients are faced with long-term care expenses.

§ 7.2-1 Medicare

Medicare will help pay for only up to 100 days in a skilled-nursing facility if the following conditions are met:

(1) The beneficiary has had a recent prior hospital stay of at least three days;

(2) The beneficiary was admitted to a Medicare-certified nursing facility within 30 days of his or her hospital stay; and

(3) The beneficiary needs skilled care, such as skilled-nursing services, physical therapy, or other types of therapy.

42 USC § 1395d(a)(2), (f).

For the first 20 days, Medicare pays 100 percent of costs. For days 21 through 100, the beneficiary must pay his or her expenses up to $164.50 per day (as of March 2017), and Medicare pays any balance. See Your Medicare Coverage, < www.medicare.gov/coverage/skilled-nursing-facility-care.html >.

Skilled care is generally defined as services provided under the general direction of a physician, by skilled and licensed professionals, without which the beneficiary would suffer a serious impairment to life or health. See 42 USC § 1395i-3. Skilled care encompasses services so inherently complex that they can be safely and effectively performed only by or under the supervision of a professional. Skilled care consists of the following:

(1) Skilled-nursing care that can be performed only by or under the supervision of licensed nursing personnel (registered nurses or licensed practical nurses); or

(2) Skilled rehabilitation services, including services such as physical therapy performed by or under the supervision of a professional therapist.

Skilled care does not include custodial care, such as assistance with activities of daily living (e.g., bathing, dressing, eating, or transferring to and using the toilet). Medicare does not pay for skilled care that is needed only on an occasional basis, such as once or twice a week. For Medicare Part A coverage, skilled care must be needed on a daily basis. 42 USC § 1395i-3. See Your Medicare Coverage, < www.medicare.gov/coverage/nursing-home-care.html >.

Although Medicare certifies many nursing homes as skilled-nursing facilities, most beneficiaries requiring nursing-home care do not need daily skilled care and therefore do not qualify for Medicare coverage.

Medicare generally requires that a patient show significant rehabilitation potential and steady improvement for the beneficiary to remain qualified for Medicare Part A skilled-nursing facility care. A decision by Medicare to stop paying for skilled-nursing facility care on this basis can be challenged.

§ 7.2-2 Long-Term Care Insurance

§ 7.2-2(a) Required Policy Provisions

Insurance for long-term care is governed by ORS 743.650 to 743.665. The provisions of the Oregon Insurance Code apply generally to long-term care insurance. ORS 743.650(3). Insurance regulations promulgated by the Oregon Department of Consumer and Business Services are set forth in OAR 836-052-0500 to 836-052-0790.

Each long-term care policy issued since 1992 must pay for covered services provided by a nursing home, an assisted-living facility, home healthcare, and adult foster care. OAR 836-052-0596. Other important aspects of the law include the following provisions:

(1) Benefits must be payable based on the policyholder's inability to perform three activities of daily living or the presence of cognitive impairment (OAR 836-052-0756(1));

(2) Activities of daily living include but are not limited to "bathing, continence, dressing, eating, toileting and transferring" (OAR 836-052-0516(1));

(3) Policies must pay for the treatment of Alzheimer's disease and related organic dementia, such as those resulting from Parkinson's disease or inoperable tumors (OAR 836-052-0756(2)(c));

(4) Policies cannot require that a policyholder receive a higher level of institutional care before benefits will be paid for a lower level of care (OAR 836-052-0566(1)(b));

(5) Preexisting conditions must be met after six months (Or Ins Div, Long-Term Care Insurance in Oregon 5, available at < http://library.state.or.us/repository/2010/201012130846541/2008.pdf >; and

(6) Qualifying for home-care benefits must be at least as easy as qualifying for nursing-home benefits (Or Ins Div, Long-Term Care Insurance in Oregon at 5).

For more information on long-term care insurance in Oregon, see Long-Term Care Insurance in Oregon.

See chapter 3 for a discussion of financial planning for long-term care insurance.

§ 7.2-2(b) Possible Abuses

The most common complaint regarding long-term care insurance received by the Division of Financial Regulation of the Department of Consumer and Business Services is the denial of benefits. See Or. Dep't of Consumer and Bus. Servs., Oregon Insurance Complaints for Calendar Year 2014 5, available at < www.oregon.gov/DCBS/Insurance/gethelp/Documents/2311-14.pdf >.

Benefits may be denied when the client has an older policy that requires a three-day hospital stay before benefits will be paid. Benefits also may be denied when the facility that the client wishes to use does not meet the definition of nursing home set forth in the insurance policy.

If the client is meeting requirements that are set forth in the policy but is being denied benefits unreasonably, the client may:

(1) Negotiate with the insurance company;

(2) Seek assistance from the Division of Financial Regulation by filing a formal complaint against the insurance company; and

NOTE: For insurance help, a person may telephone the Division of Financial Regulation at 1-888-877-4894, or download a complaint form at < http://dfr.oregon.gov/gethelp/Pages/file-a-complaint.aspx >. The Division of Financial Regulation will send a summary of the complaint to the insurance company. The insurance company or agent must respond within 21 days. If the response is adequate, the Division of Financial Regulation will send it to the client with an explanatory letter. If the response is not adequate, a compliance officer will work with

...