LTC: Daily Benefit Vs Monthly Benefit

[oozo]

Generally, is a daily benefit better than a monthly benefit?
We have 1 month with 29 days, 4 months with 30 days and 7 months with 31 days. How does LTC policy calculate 1/2 month or less, eg. 10 days vs 14 days vs 31 days?

An agent friend of mine tells me monthly benefit is typically best, but when I checked with local Asst. Living Fac. here in my hometown, they said they felt that the daily benefit was serving their residents better.

Your thoughts, please?

 

[Chuckles21]

Generally, is a daily benefit better than a monthly benefit?
We have 1 month with 29 days, 4 months with 30 days and 7 months with 31 days. How does LTC policy calculate 1/2 month or less, eg. 10 days vs 14 days vs 31 days?

An agent friend of mine tells me monthly benefit is typically best, but when I checked with local Asst. Living Fac. here in my hometown, they said they felt that the daily benefit was serving their residents better.

Your thoughts, please?

Monthly

Let's say your have a $200/day benefit. For this hypothetical 30 day month on 20 of those days your care costs $150/day and the other 10 days it costs $300/day due to special treatments happening those days. For those 10 days the client will owe $100/day out of pocket.

Same scenario but monthly benefit of $6000/m. $150x20days = $3000, $300x10days=$3000 total cost for the month = $6000 and no out of pocket.

So you tell me, would you rather pay $1000 out of pocket or have it all paid for.

 

[Mr_Ed]

Generally, is a daily benefit better than a monthly benefit?
We have 1 month with 29 days, 4 months with 30 days and 7 months with 31 days. How does LTC policy calculate 1/2 month or less, eg. 10 days vs 14 days vs 31 days?

An agent friend of mine tells me monthly benefit is typically best, but when I checked with local Asst. Living Fac. here in my hometown, they said they felt that the daily benefit was serving their residents better.

Your thoughts, please?

9 times out of 10, a daily benefit is better.

 

[csalter]

9 times out of 10, a daily benefit is better.

Most places I read state that monthly is better for the reason stated above in Chuckles' example. Why do you think otherwise?

 

[Mr_Ed]

Most places I read state that monthly is better for the reason stated above in Chuckles' example. Why do you think otherwise?

with most policies, a monthly benefit costs about 6% more than a daily benefit.

with most policies, a monthly benefit does NOT pay more benefit in months that have 31 days.

For the same premium would you rather have a policy that pays $4,500 per month OR one that pays $160 per day?

($160 x 30 = $4,800).
($160 x 31 = $4,960).


The only times that a monthly benefit is better is if you're getting:

A) a lot of free care from relatives at least 5 days per month

OR

B) if the cost of your care fluctuates dramatically throughout the month.

"B" RARELY happens. I've never seen a case where "B" happened.

If someone could provide me with a real life example of care costs fluctuating dramatically from day to day, then I'll retract this post.


mred

 

[csalter]

with most policies, a monthly benefit costs about 6% more than a daily benefit.

with most policies, a monthly benefit does NOT pay more benefit in months that have 31 days.

For the same premium would you rather have a policy that pays $4,500 per month OR one that pays $160 per day?

($160 x 30 = $4,800).
($160 x 31 = $4,960).


The only times that a monthly benefit is better is if you're getting:

A) a lot of free care from relatives at least 5 days per month

OR

B) if the cost of your care fluctuates dramatically throughout the month.

"B" RARELY happens. I've never seen a case where "B" happened.

If someone could provide me with a real life example of care costs fluctuating dramatically from day to day, then I'll retract this post.


mred

I always wondered about that extra day. I thought about that as I considered the MedAmerica policy, but thought $6000 a month was $6000 a month.

I also thought about the need for services one day as opposed to another. You either need it or you don't. If I need help going to the bathroom and eating on Monday, I will probably need that help on Tuesday, Wednesday, Thursday and Friday too. I would not be skipping any days.

Thank you for explaining that for me.

 

[Mr_Ed]

Chuckles gives this example:


For this hypothetical 30 day month on 20 of those days your care costs $150/day and the other 10 days it costs $300/day due to special treatments happening those days. For those 10 days the client will owe $100/day out of pocket.



... but it's ridiculous.

why would anyone's care at home cost $150 per day 20 days of the month and $300 per day 10 days per month.

That's absurd. TWICE the cost for every third day of care??? That's absolutely ridiculuous.

 

[oozo]

But, if I have a daily benefit that is lower than actual daily costs incurred, then I will definitely have an OOP cost for every single day that I am in a facility, right? I am told that facilities bill by the month, no matter how long your actual stay for that month. If this be true and one is in a facility for eg. 10 days, but the facility charges for the month (eg. 31 days), then what happens? Does this unearned money paid to them come out of my benefit pot of money? even though I did not stay but for 10 days? This is highly unfair to me as a patient and, even if I can call the facility and fight these unfair extra daily charges, I may be too weak and sick to care....hence, someone is now tapping my benefit pot of money w/o my permission. So, is this why the monthly benefit is 6% more premium costly to purchase? because of how facilities bill and get paid? Why does LTC companies allow such a practice, to pay on a monthly bill for less than a month of services?

Thanks.

OOZO

 

[Mr_Ed]

But, if I have a daily benefit that is lower than actual daily costs incurred, then I will definitely have an OOP cost for every single day that I am in a facility, right? I am told that facilities bill by the month, no matter how long your actual stay for that month. If this be true and one is in a facility for eg. 10 days, but the facility charges for the month (eg. 31 days), then what happens? Does this unearned money paid to them come out of my benefit pot of money? even though I did not stay but for 10 days? This is highly unfair to me as a patient and, even if I can call the facility and fight these unfair extra daily charges, I may be too weak and sick to care....hence, someone is now tapping my benefit pot of money w/o my permission. So, is this why the monthly benefit is 6% more premium costly to purchase? because of how facilities bill and get paid? Why does LTC companies allow such a practice, to pay on a monthly bill for less than a month of services?

Thanks.

OOZO

the facility will not bill you for 30 days if you're only in the facility for 10 days.

 

[csalter]

But, if I have a daily benefit that is lower than actual daily costs incurred, then I will definitely have an OOP cost for every single day that I am in a facility, right? I am told that facilities bill by the month, no matter how long your actual stay for that month. If this be true and one is in a facility for eg. 10 days, but the facility charges for the month (eg. 31 days), then what happens? Does this unearned money paid to them come out of my benefit pot of money? even though I did not stay but for 10 days? This is highly unfair to me as a patient and, even if I can call the facility and fight these unfair extra daily charges, I may be too weak and sick to care....hence, someone is now tapping my benefit pot of money w/o my permission. So, is this why the monthly benefit is 6% more premium costly to purchase? because of how facilities bill and get paid? Why does LTC companies allow such a practice, to pay on a monthly bill for less than a month of services?

Thanks.

OOZO

I don't believe anyone will bill you for services not rendered. You can only be billed for the days you were there. However, the impression I get is that you will receive a check for whatever the amount your monthly benefit regardless if you're there for 3 days or 30 days for that month.

The trick to LTC is that you can't see into the future to know how you will need your benefits to know if it will be more beneficial to go daily or monthly; to have a benefit period of 3 years or 5 years; to have compounded inflation or not; or to have an elimination period that is one month or half a year. This is all a guessing game and any choice you pick today is one that could be good or bad in the future. However, to have some insurance is better to have none regardless of what you choose. All you really want in the end is to make sure that the insurance company will be there if you need to use your LTC.