Legal News Alert

Long Term Care Insurance in Michigan

Date: 03.25.2004

Many of our clients ask whether they should purchase long term care insurance. There is no single correct answer for everyone.

There are five things that everyone should consider:

1. Medicare does not cover basic nursing home care. The law provides a limited benefit for skilled nursing care after a hospital stay. To qualify, a person must fall within a specific definition. There is a limit of 100 days and co-pays may apply after day 20. Medicaid qualification requires depletion or legal divestment of assets and is not a good way to plan for long term care.
   
   
2. Michigan regulates Long Term Care Insurance by statute. (MCL 500.3901). This means that there are certain rules that apply to all policies in Michigan. For example, all policies must cover basic care, because basic care is the most needed care of people who purchase policies. This does not mean that all policies are alike. Some companies include mental illness and alcoholism; some do not. Some restrict pre-existing conditions. Some provide for a full continuum of care and include home care and assisted living care. So the first thing to understand is exactly what the policy covers. One of the easiest ways to do this is to ask for the "Summary of Coverage" and compare, compare, compare. Note that the policies are often for a fixed period of years, not for "lifetime" care.
   
   
3. Cost: The longer you wait to purchase the coverage, the more expensive it will be. In addition, companies do not have to provide coverage and may well turn a person down once they develop a medical condition. It is important that you be honest with the company when they ask medical questions. If you are not truthful with the company, this may allow them to later decline to pay.
   
   
4. Ask about the company's insurance rating. All insurance companies are not the same. You should only buy from an established company with an excellent insurance rating. The company needs to be there when it is time to pay benefits.
   
   
5. These policies are still fairly new. If you are a younger individual, it might be a "safe risk" to wait a few years and see if the cost of the coverage comes down as more carriers enter the market.

Please let us know if we can assist you in any way. The highest compliment is the referral of someone with legal questions. We appreciate your business!

BRINKS & ASSOCIATES
ATTORNEY AT LAW
4641 N. BRETON COURT
KENTWOOD, MI 49508
Ph: 616-656-1090
Fax: 616-656-5859

Copyright 2004 - Brinks & Associates - Your may photocopy this Legal News Alert without charge, as long as you copy it exactly.

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