The Language of Long-Term Care

A version of this article previously appeared in August 2017.

As I reflect on my parents' final years, a period that included multiple hospital stays, trips to rehab, and the hiring of in-home caregivers, I realize that my siblings and I were often a step behind with our responses.

We initially hired in-home caregivers to help for 10 to 20 hours a week when, in hindsight, we should have had them there every day. We made the difficult decision to move my dad to a long-term-care facility with memory care only after he had taken a few serious falls at home that caused him a lot of physical discomfort. And so on.

There were a lot of reasons for our slow response times. There was no doubt a healthy amount of denial—both on my parents’ part as well as from me and my siblings—about their decline. My parents had always expressed a strong preference to remain independent and in their home for as long as possible. Another factor was that each ramp-up in care came with its own sometimes steep learning curve. On the fly, we figured out which rehab facilities in our community were the best (and which to avoid), and the pros and cons of hiring caregivers on our own versus using an agency. Each of those learning experiences took a little bit of time and brought some angst, too.

Further complicating matters is that long-term and end-of-life care have languages of their own: To figure out what you're doing, you need understand the difference between rehab and a nursing home, and how palliative care is different from hospice.

Any long-term-care journey, whether it’s your own or that of someone you love, is arduous in its own way. To aid a tiny bit in the process, I’ve compiled a list of some of the key terminology related to long-term care.

Types of Care

Rehab: A generic name for rehabilitation therapy to help patients recover from a serious illness, injury, or surgery. Medicare covers, in full, the first 20 days of rehab care in a qualified facility following a qualifying hospital stay (defined as three days in a row in the hospital as an inpatient). For days 21-100 (again, following release from a qualifying hospital stay), you must pay a co-payment (often covered by a supplemental health-insurance policy), while Medicare covers the remainder of the cost. For days 101 and beyond, Medicare does not cover the costs of rehab care. Patients receive rehab therapy in two main settings: acute inpatient rehabilitation facilities or skilled nursing facilities. (Note that some of the Medicare and Medicaid rules have been adjusted owing to the ongoing coronavirus crisis.)

Acute Inpatient Rehabilitation Facilities: These facilities deliver the most intensive type of rehab and are usually only recommended for patients who need some type of specialized care that cannot be adequately provided in a skilled nursing facility. Because care in an IRF is more costly than in a skilled nursing facility, the requirements for admittance are more stringent.

Activities of Daily Living: Basic activities that are used to measure a disabled or elderly individual's level of functioning. The key ADLs are bathing, dressing, eating, ambulating/transferring (moving from place to place, or from the standing position to a chair), grooming, and toileting. Activities of daily living are metrics used within the healthcare system, but families can also think about them when calibrating how much care their loved ones need.

Instrumental Activities of Daily Living: These are more complex self-care tasks, including shopping and meal prep, navigating transportation systems, and personal financial management. Slips in IADLs are usually the first signals that an elderly parent or loved one needs more help.

Skilled Nursing Facility (sometimes called a SNF or "Sniff"): A type of facility that provides skilled nursing care, usually medical care and/or rehabilitation services. Such rehab care is covered, in whole or in part, by Medicare for up to 100 days. Some skilled nursing facilities do double duty, providing short-term rehab for patients who have had a qualifying hospital stay while also serving as long-term residential facilities.

Nursing Home: A facility that helps individuals with the activities of daily living, including eating, bathing, and getting dressed. Nursing homes are also likely to coordinate and/or provide medical care for individuals who need it, but their central focus is to help residents with their daily lives. In contrast to care provided in a skilled nursing facility to people who have had a qualifying hospital stay, nursing-home care (sometimes called "custodial care") is not covered by Medicare. Instead, costs are covered out of pocket by long-term-care insurance (for those who have such policies) or Medicaid for individuals with limited assets.

Assisted Living Facility: A type of facility geared toward people who need assistance with ADLs and IADLs but who do not need the type of extensive care provided in a nursing home. Most assisted living facilities, like nursing homes, help patients coordinate medical care, but providing medical care to sick individuals is not the central focus. Many ALFs now have locked "memory care" units geared toward people with Alzheimer's disease or dementia. As with nursing homes, stays in ALFs are not covered by Medicare; instead, such care is covered out of pocket by long-term-care insurance (for those who have it) or Medicaid.

Independent Living Facility: A type of facility geared toward individuals who can live independently and do not need assistance with activities of daily living but want access to certain services such as meals and transportation. As with assisted living facilities, stays in independent living facilities are not covered by Medicare.

Continuous Care Retirement Community: A type of community geared toward providing a gradation of care to older adults—from independent living to assisted living to nursing-home care. The goal of the CCRC is to help older individuals reside in the same community for the remainder of their lives. Such communities tend to be the most costly of all eldercare options, often requiring an up-front sum as well as monthly charges that will vary depending on the level of care the individual is receiving. As with nursing homes and assisted living facilities, most of the care provided within CCRCs is not covered by Medicare, unless it’s medical care or skilled nursing care that is normally covered by Medicare (see “Skilled Nursing Facility,” above).

Custodial Care: Nonmedical care provided to assist older adults with the activities of daily living. As a rule, custodial care alone is not covered by Medicare; instead, such costs must be covered out of pocket with long-term-care insurance, or by Medicaid for eligible individuals.

Adult Day Services: Services, including social activities and assistance with activities of daily living, provided during the day to individuals who otherwise reside at home. Approximately half of the individuals who take part in adult day services have some form of dementia, according to the National Adult Day Services Association; thus, adult day services frequently focus on cognitive stimulation and memory training. Medicare may cover adult day services in certain limited instances, but it generally does not.

Palliative Care: Care geared toward providing pain relief and emotional support to individuals with serious illnesses. In contrast to hospice care, which is for terminally ill patients, palliative care can be provided to individuals undergoing curative treatment. Medicare Part B may cover some of the prescriptions and treatments offered under the umbrella of palliative care.

Hospice Care: Care provided to individuals at the end of their lives; the focus is on keeping the patient comfortable rather than extending life. Such care may be provided at home, in the hospital, or in a skilled nursing facility. Hospice care is covered by Medicare if your doctor and the hospice director certify that you're terminally ill and have less than six months to live. To be covered by Medicare, hospice care cannot be delivered in conjunction with any curative treatment.

Insurance

Long-Term-Care Insurance Covers long-term care, including custodial/personal care not covered by Medicare. Depending on the policy, the type of care covered may be delivered in a facility, at home, or through adult daycare services. Owing to insurers' negative claims experiences (people who have purchased the policies tend to use them and don't let them lapse), many insured individuals have confronted huge premium spikes in recent years; other insurers have gotten out of the long-term-care business altogether.

Hybrid Life/Long-Term-Care Insurance: A life insurance product that includes a long-term-care rider. If the individual required long-term care during their lifetime, the cash value of the life insurance policy would be reduced accordingly. In addition to the attraction of providing a death benefit, the policies also may be subject to less-stringent health screening than pure long-term-care policies. Yet the policies can also be complex, making it difficult to comparison-shop; purchasers can also face opportunity costs.

Hybrid Annuity/Long-Term-Care Insurance: An annuity that includes a rider to provide a higher level of monthly income if long-term care is needed. When long-term-care coverage is needed, the value of the benefit is subtracted from the value of the annuity. Like hybrid life/long-term-care insurance, these products are complicated and it's difficult to comparison-shop.

Short-Term-Care Insurance: Structured much like long-term-care insurance but covering care for one year or less.

Elimination Period: Similar to a deductible for other types of insurance, this is the amount of time during which one must pay long-term-care costs out of pocket before insurance kicks in. The longer the elimination period, the lower the premiums will be.

Benefit Triggers: Triggers used by insurers to determine whether a long-term-care policy will begin paying benefits. These triggers typically depend on the individual's ability to complete a certain number of activities of daily living.

Medicaid Eligibility

Institutionalized Spouse: A spouse who has moved into a nursing home or other long-term-care setting.

Community Spouse: A healthy spouse who remains in the community even after the other spouse has moved into a nursing home and requires Medicaid benefits.

Exempt (or Noncountable) Assets: Assets that can be owned by the institutionalized person without affecting Medicaid eligibility. Specific parameters depend on the state where you live, but exempt assets typically include $2,000 in cash, a vehicle, personal belongings, and household goods. In most states, a primary residence is also considered an exempt asset, even if an individual ends up moving into a nursing home, so long as a spouse or child lives there. The individual's equity in the home cannot exceed certain limits; for 2021, it's $603,000 in most states. Moreover, the state can attempt to recover any money paid out through Medicaid when the owner dies and the home is sold.

Countable Assets: Assets that are counted when determining Medicaid eligibility. The specific parameters depend on the state in which you reside, but countable assets usually include checking and savings accounts, retirement-plan assets, and additional vehicles (in addition to the one vehicle that is considered exempt).

Community Spouse Resource Allowance: The amount of assets that the community (in other words, healthy) spouse can retain, even as the institutionalized spouse qualifies for Medicaid. Those assets typically include a house, a car, and financial assets equal to one half of the couple's assets, subject to minimum and maximum thresholds. (The maximum allowable figure is $130,380 in 2021.)

Lookback Period: The five-year period prior to an individual’s application for Medicaid benefits. If assets were transferred to children or any other individuals during this five-year period, it will trigger a period of ineligibility for Medicaid benefits. The length of the penalty period is calculated by dividing the amount of the transfer by the average monthly nursing-home costs in the region or state where the individual resides. The goal of this provision is to keep otherwise-wealthy individuals from transferring assets to qualify for long-term-care coverage under Medicaid.