Are you thinking about long-term care insurance, but not sure where to start? Not sure what it covers or who will pay for it? Do I qualify? Does my regular health insurance carry a rider which includes long term care? Well, stand by because I’m about to show you long term care is more than just about insurance, it’s a valuable service anyone can use.
Unlike regular health insurance policies which cover incurring medical expenses, a long-term care insurance policy is “designed to cover long-term services and supports including personal and custodial care in a variety of settings such as your home, a community organization, or other facility” (Longtermcare.gov).
A study done by Roger and Komisar found that almost 10 million people in the United States alone, needed some type of long-term care and 3.6 million were under the age of 65! Most studies assume at least 70% of people over 65 will need long-term care.
So, as you begin to think about how you will handle your long-term care if needed, I will try to answer some basic questions:
What is Long-Term Care?
• Long-term care includes services to meet your daily care needs beyond medical care. Most long-term care is not medical care, but covers the cost of assistance with everyday care, also called Activities of Daily Living (ADLs), such as bathing, dressing, using the restroom, moving from room to room, eating, and other similar activities.
• Other long-term care helps assist with what is known as Instrumental Activities of Daily Living (IADLs), which includes housework, managing money, taking medication, preparing meals, shopping for clothing or groceries, or taking care of pets.
• The cost of long term care insurance varies depending on your age when you begin the policy, your health, the state you live in, the maximum amount a policy will pay for services per day, or the maximum amount of days a policy will cover in a year. Many insurance policies have limits on how long and how much they are willing to pay. For example, some will cover expenses for up to five years while others will continue coverage for as long as you live. Also, be aware that the insurance company can raise the premium on the policy – even if it isn’t the premium you began with – so it is a good idea to check out information on the company’s premium rate history.
• The American Association for Long-Term Care Insurance posts the average annual cost for various age ranges here: http://www.aaltci.org/long-term-care-insurance-rates/.
Medicare and Medicaid:
• Medicare will pay for some long-term care, but generally only for a short period of time. If you require skilled services or rehabilitation Medicare on average will cover 22 days. Medicare does not cover ADLs even though they make up the bulk of long-term care services people actually need.
• Medicaid pays the largest portion of long-term care services, but in order to qualify, you must meet certain financial and eligibility requirements. Eligibility is often determined by the amount of assistance you will need with ADLs or IADLs.
Should I buy long-term care insurance:
• Long-term care insurance is expensive, but if you or a loved one are unable to care, it can be a life-saver. Many have gone through their entire life savings and all assets trying to pay for long-term care.”The #1 fear retirees have is the fear of running out of money.” Forbes Magazine.
Qualifications: If you can respond to any of the statements below with a “yes,” you may not be able to make a long-term care insurance claim. *This is only a partial list…
• Perform daily activities such a bathing, dressing, eating and walking.
• Handle finances, housework, laundry, meal preparation, taking medication, shopping and driving.
• Function without the assistance of another or a mechanical device such as a walker or wheelchair.
• No signs of memory loss, confusion or forgetfulness.
• Medical condition should be stable and not deteriorating.
Keep in mind, the purpose of long-term care insurance is to protect your hard earned savings. Knowing you have long-term care insurance is so much less stressful for you and your family. There are many companies offering long-term care; do your homework and let a professional assist you.
Written by Jacob Edward at Senior Planning