It’s always pleasing to highlight good news! Recently, the legislature in New Jersey recently passed a new law that will offer seniors on Medicaid more long-term care options. By 2008, senior citizens living in New Jersey will have a choice in the type of long-term care they receive through Medicaid, under a law made by Governor Jon S. Corzine. The law provides “an extraordinary change in direction and policy in a way that makes sure our seniors have a choice,” said Corzine in a recently concluded AARP summit on long term care.

Currently, New Jersey spends $1.68 billion of its Medicaid long-term care budget on nursing home care, compared with $162 million on community-based care like assisted living facilities, home health care and adult day care. That means a lot of money will be going to skilled nursing facilities. The law will now help bridge the gap between money going to nursing homes versus money going to people in the community. “Rather than requiring that nursing homes be the first stop, now nursing homes will be the appropriate stop, if necessary,” said Dr. Fred Jacobs, state health commissioner for New Jersey.

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In a long-term care insurance (LTCI) policy, the elimination period is always referred to as the policy deductible. In many ways it is similar to the deductible used in major medical insurance policies. One significant difference is this: rather than a certain dollar amount that you will initially pay for your own care expenses, there is a specified number of days for which you will be responsible for your own homecare.

What are My Options?

Nowadays, there are only a few carriers that offer a zero day elimination period. The most common choices are 30, 60, 90, 180 and 365 days, although these periods can vary from one carrier to another. The choice of 180 or 365 days is most often made by those who have significant assets of their own. Selecting a longer period helps them keep the cost of LTCI extremely low. Even if one chooses a 90-day elimination period, the amount of funds put at risk is miniscule when compared to the asset protection afforded by the policy’s total pool of benefits.

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