What is long-term care?
Long-term care is the medical and/or social services term for helping people who develop disabilities or chronic care needs. For example, there may come a time when you or a loved one need help walking, getting dressed, eating or bathing. It also includes the kind of care you would need if you had a severe cognitive impairment such as Alzheimer’s disease.
Long-term care services may be brief with full recovery, or it can continue for years. Services may be provided in a person’s home, in the community, or in a residential facility (e.g., nursing home or assisted living facility).
Will Medicare pay for long-term care?
Medicare is health insurance for people age 65 or older, under age 65 with certain disabilities. You must have entered the United States lawfully and have lived here for 5 years to be eligible for Medicare.
Medicare generally doesn’t pay for long-term care. Medicare also doesn’t pay for help with activities of daily living or other care that most people can do themselves. Some examples of activities of daily living include eating, bathing, dressing and using the bathroom.
Medicare only pays for care in a skilled nursing facility in certain situations and only for a defined period of time.
For nursing home care, Medicare will pay 100% of the first 20 days (providing you are receiving daily skilled care). From days 21-100, you pay the first $133.50 per day (2009) and Medicare will pay the balance. After day 100, Medicare pays nothing and you are solely responsible for all costs.
What is long-term care insurance?
Long-term care insurance pays for long-term care services. Policies vary in terms of what they will cover and insurance companies do require that applicants qualify for the coverage through an underwriting process.
What benefits do you get from long-term care coverage? & Why do people buy it?
As you would expect, a good long-term care insurance policy delivers broad and flexible benefits to help provide and pay for the long-term care services you need.
There are 6 common reasons why people want to buy this insurance coverage:
- Relieve the potential burden on their loved ones
- Help to make certain they have a choice of care.
- Help to make certain they maintain their independence
- Help to protect the assets they’ve worked to earn (either for the spouse or to pass on to an heir)
- Avoid having to rely on Medicaid
- Proactively make decisions that help protect their family and themselves
Do you need long-term care insurance protection?
Maybe you do or maybe you don’t – this is, of course, a personal decision. The best way to make an intelligent decision is to look at the facts.
How likely are you to need long-term care?
What would you be placing at risk if you did need long-term care?
Can you afford the insurance?
What’s the likelihood you will need long-term care?
Don’t think that long-term care is just for elderly people. Young men and women also need long-term care for a variety of reasons including accidents, multiple sclerosis, strokes or other debilitating conditions. 40% of the people receiving long-term care are working-age adults between the ages of 18 and 64.
What’s the likelihood that you’ll spend time in a nursing home?
- More than 70 percent of nursing home residents are women; their average age at admission was 80.
- When you reach age 65, you have a 40% lifetime chance of entering a nursing home, and a 10% risk that you will stay there at least five years.
- The average length of stay in a nursing home (current resident) is 835 days.
What will you pay for nursing home care?
The national average rate for a private room in a nursing home is $212 a day, or $77,380 annually. That equals $177,020 for the average nursing home stay of 2.29 years.
If you want care at home, how much will that cost?
If you’re like most people who need care, you would prefer to stay in the comfort of your own home. For this reason, many people do receive care at home instead of, or prior to, a nursing home stay. Long-term care insurance may include coverage for at-home care. Full-time home health care can cost just as much as nursing home care. The average hourly rate for home care is $18 for a Homemaker/Companion and $20 for a Home Health Aide. It’s important to keep in mind that this is just part of the cost because, if you live in your own home, you may still have to pay to take care of your home. However, for most people, home care services are combined with care from family members and cost considerably less than nursing home care.
Is LTC Insurance financially appropriate for me?
Insurance may be the right solution, but it depends on your circumstances. In our experience as long-term care financing specialists, we recognize where the need may be greatest. For example:
- If you have minimal assets, long-term care insurance is generally inappropriate because the premiums may deplete those assets and you will likely qualify for Medicaid anyway.
- If you are independently wealthy and can pay for long-term care yourself, the coverage may nevertheless be very attractive because the relatively modest premium makes sense when compared to the likely high costs of the care.
- If you have assets worth protecting, but are not independently wealthy, you need to get the facts about long-term care insurance and consider this coverage as an alternative to paying for the care yourself.