Welcome to Ask Lacey, an advice column in which accredited financial counselor and MilMo founder Lacey Langford answers your pressing financial questions. Have a question for Lacey? Submit it here.
Q.: I am a 100% disabled vet. I am paying $200+ per month for LTC insurance. Do I need to keep that insurance?
Thanks so much for your question. It’s awesome that you’re taking a good look at your finances and wondering whether the $200-plus per month in long-term care (LTC) insurance is still worth it. A lot of people don’t even think to revisit these decisions, so you’re already ahead of the game. As a 100% disabled veteran, you have valuable Department of Veterans Affairs (VA) benefits that might make private LTC insurance less necessary, but it’s worth digging into the details to make sure you’re making the right call for you.
Since I don’t know your age or whether you’re on Medicare or Medicaid, I’ll keep things broad to cover all bases.
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Understanding VA Long-Term Care Benefits
As a veteran with a 100% service-connected disability rating, you fall into Priority Group 1 for VA health care, which gives you access to long-term care services without copays or deductibles. The VA offers a range of long-term care options, including:
Community Living Centers (CLCs)
These are VA nursing homes offering 24/7 skilled nursing, rehabilitation and help with daily tasks such as bathing or eating. With more than 100 CLCs across the U.S., you’re eligible for unlimited care as a Priority Group 1 vet, though availability depends on your local VA.
Home and Community-Based Services (HCBS)
Think home health aides, adult day care or hospice care. If the VA deems these medically necessary, you’re likely covered without copays due to your disability rating.
State Veterans Homes
These state-run facilities, partly funded by the VA, offer nursing home care and sometimes assisted living. Your 100% rating puts you at the front of the line, with the VA often covering part of the cost.
Aid and Attendance (A&A) Benefit
This additional monthly pension provides support if you need assistance with daily activities or are housebound. It can cover things such as home care or nursing home costs. To qualify, you need to be on the VA pension program, meet income/asset limits and show a need for help. Your rating makes this a strong possibility.
Comparing VA Benefits to Private LTC Insurance
Private LTC insurance, like the policy you have, typically covers services such as nursing home care, assisted living or in-home care when you can no longer perform normal daily activities. However, unlike VA benefits, private insurance often requires medical underwriting, has premium costs that may increase over time and may not pay out if you never need long-term care. Here's how your VA benefits compare.
- Cost: As a 100% disabled veteran, you're exempt from copays for VA-covered long-term care services, including CLCs and HCBS. This could make your private insurance excessive if the VA is covering all your needs.
- Choice: Private insurance lets you pick non-VA facilities, such as a specific assisted living community. The VA doesn’t cover room and board in private assisted living, so if that’s your preference, your policy might be worth keeping.
- Coverage gaps: VA services can vary by location, and wait times for CLCs or HCBS might happen due to limited spots or funding. Private insurance could be a backup if VA care isn’t readily available.
- Medicare/Medicaid: If you’re 65 or older, Medicare covers only short-term skilled nursing (up to 100 days after a hospital stay), not long-term care. If you qualify based on income and assets, Medicaid could cover most costs, reducing the need for private insurance.
Actionable Steps to Make an Informed Decision
Here are some action items to help you determine whether to keep your LTC insurance.
Check Your VA Options
Contact the VA or call their benefits hotline (800-827-1000). You can also talk to a VA social worker to confirm your long-term care benefits. Ask about local availability and wait times. Find nearby VA facilities at the VA Nursing Home search.
Review Your Policy
Look at what your LTC insurance covers, such as in-home care, nursing homes, the daily benefit and whether premiums might go up. Compare this to what the VA offers. Consider whether the policy’s flexibility, such as having the option to choose private facilities, is worth the cost.
Get Expert Advice
Talk to a VA accredited representative or financial planner specializing in veterans benefits to see how your insurance fits with VA benefits. A financial professional can help you weigh the pros and cons based on your unique situation. Avoid paying for A&A help; VA social workers offer it free.
Think About Your Needs
Do you want care in a specific private facility, or are VA options such as CLCs enough? If you have assets to protect for a spouse or heirs, private insurance might help.
Making Your Decision
If VA services such as CLCs, HCBS or the A&A benefit fully cover your potential long-term care needs and are available in your area, you may not need to continue paying for private LTC insurance, especially at more than $200 monthly. Canceling could save you a lot of money, especially since your 100% disability rating eliminates copays for VA care. If you're eligible for Medicaid or expect to be, this could further reduce the need for private insurance.
However, if the flexibility of private facilities is of value to you, you anticipate gaps in VA service availability or you'll want to ensure coverage for non-VA settings, maintaining your policy could provide peace of mind.
Before canceling your private insurance, confirm that VA services meet your needs and consider keeping the policy until you're certain or have talked to a professional. Ultimately, your decision hinges on balancing the VA benefits you're entitled to with your personal care preferences and financial goals. I hope this helps. Thank you again for your question.
Disclaimer: This information is provided for educational purposes only and is not intended as financial advice. Please consult a qualified financial professional or VA benefits expert to evaluate your specific situation and needs before making decisions about your long-term care insurance.
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