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Standard insurance doesn't pay for long-term care

Long-term care is needed by those who, due to an accident or infirmity, are no longer able to care for themselves or their households. It provides assistance with the most intimate aspects of life _ personal hygiene, getting dressed and groomed, using the bathroom, preparing and eating meals, and getting from one place to another, in the home or in the community. And, as the term implies, this care goes on for months or years rather than days or weeks.

Who pays for long-term care? For the most part, we do. Long-term care is not paid by Medicare, Medigap or the standard health insurance you may have on your own or through your employer.

A new insurance product does allow some protection. Long-term care insurance pays nursing home benefits and, in some cases, for home health care, assisted living and adult day care services. I hope this column will shed some light on whether you need and/or can afford a long-term care insurance policy.

Question: What are my chances of needing long-term care?

Answer: By the age of 65, there's a 2-in-5 chance that there will be a need for some assistance with the activities of daily living. While we associate long-term care with advanced ages (80+), nearly 40 percent of all long-term care recipients are working age adults under age 65. As the Christopher Reeves accident demonstrates, catastrophes don't discriminate based on age.

Question: How does long-term care insurance work?

Answer: Long-term care insurance enables you to pay a known premium to offset the risk of potential much larger out-of-pocket expenses. Although long-term care insurance is relatively new, more than 130 companies now offer coverage.

Question: What do policies cost?

Answer: In 1996, individual policies without an inflation adjustment feature range in cost from about $750 per year to more than $1,250. (Inflation adjustments can add 30 to 65 percent to your premium, depending on the option you select, but can keep benefits in line with rising costs.)

But the actual premium you'll pay depends on many factors, including your age, the level of benefits and the length of time you are willing to wait until benefits begin.

Question: At what age should I purchase a policy?

Answer: Hard to say, but you should know that nearly all major carriers "lock in" your age at enrollment. (If you purchase your policy at age 43, you will always pay a 43-year-old rate.) The lower the age, the lower the premium. The only way the premiums may rise is if the company goes to the Insurance Commission and raises if for everyone in the state.

Question: Can I wait until I think I need some help to apply for a policy?

Answer: All dependable programs are medically underwritten and you must qualify as a good risk to be accepted by major insurance companies. While perfect health is not mandatory for acceptance, reasonably good health is. Just like homeowners insurance, you can't wait until a hurricane is bearing down to get storm coverage.

Question: My husband has Alzheimer's. Can I get a long-term care policy for him?

Answer: Unfortunately, Alzheimer's is uninsurable.

Question: How long a waiting period before I could use my long-term care insurance?

Answer: This is one of the choices you will make when designing a plan. Tantamount to a deductible, this is the number of days that must pass after care starts before the policy begins to pay. Choices can range from first-day coverage to as much as 100 days. Today, a 100-day elimination period represents about $11,000 out of pocket at a rate of $110 per day for most forms of care. Compare premiums for low elimination periods to high and weigh the difference. Do not count on Medicare in your decision. Determine what you can afford out of pocket.

Question: How can I find the best agent and the best insurance product?

Answer: There are two types of long-term care insurance agents: One is "captive" with only one company but specializing in long-term care. The other type is "independent" and carries several companies from which to shop. I'd deal with an agent that represents many companies. They'll shop for you. Then it's up to you to carefully compare on a regular basis, say, annually. If you see a better plan, simply replace the one you had.

Question: I've heard it is possible to legally impoverish yourself so that you legally qualify for Medicaid, the federal program that pays the nursing home bill for low income people.

Answer: The rules are changing. Eligibility for welfare programs is tightening and many strict new laws are already in place. If you'd like a copy of the 1996 Medicaid eligibility guidelines, send a legal-sized, self-addressed stamped to me c/o Seniority (address at end of column).

Question: Can't very wealthy people find more financially sound alternatives to the purchase of long-term care insurance?

Answer: Wealthy people have the luxury of self-insuring, but a long-term care policy offers one option for transferring high risk.

Readers, this is only a peek at the complex and critically important topic of long-term care insurance. Such policies provide one intriguing option, but they are not for everyone. A variety of strategies may be employed to pay for long-term care, including personal savings, investments and governmental assistance. Write AARP Program Department, 601 E St. NW, Washington, D.C. 20004, to request a free copy of "Before You Buy _ A Guide to Long-Term Care Insurance."

_ Special thanks for technical assistance with this column to Barbara Haselden, owner of Hometown Insurors in St. Petersburg, whose firm specializes in long-term care insurance.

_ Helen Susik is a gerontologist at the Suncoast Gerontology Center at the University of South Florida in Tampa. You can write to her c/o Seniority, the Times, P.O. Box 1121, St. Petersburg, FL 33731.