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Long Term Care Insurance

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What is Long-Term Care?

Long-term care is a variety of services and supports to meet health or personal care needs over an extended period of time. Most long-term care is non-skilled personal care assistance, such as helping to perform everyday Activities of Daily Livings (ADLs), which are:

  • Bathing
  • Dressing
  • Using the Toilet
  • Transferring (to or from bed or chair)
  • Caring for incontinence
  • Eating

The goal of long-term care services is to help you maximize your independence and functioning at a time when you are unable to be fully independent.

Who Pays For Long-Term Care?

People pay for long-term care in a variety of ways. These include: using the personal resources of individuals or their families, long-term care insurance, and some assistance from Medicaid for those who qualify. Medicare, Medicare supplement insurance, and the health insurance you may have at work usually will not pay for long-term care.

Individual Personal Resources

Individuals and their families generally pay for part or all of the costs of long-term care from their own funds. Many use savings and investments. Some people sell assets, such as their homes, to pay for their long-term care needs.

Medicare

Medicare’s skilled nursing facility (SNF) benefit does not cover most nursing home care. Medicare will pay the cost of some skilled care in an approved nursing home or in your home, but only in specific situations. The SNF benefit only covers you if a medical professional says you need daily skilled care after you have been in the hospital for at least three days and you are receiving that care in a nursing home that is a Medicare-certified skilled nursing facility. While Medicare may cover up to100 days of skilled nursing home care per benefit period when these conditions are met, after 20 days beneficiaries must pay a coinsurance fee. While Medicare may pay for nursing home care sometimes, it doesn’t cover the costs of care in assisted living facilities.

While many people would like to receive care in their own homes, Medicare does not cover homemaker services. In addition, Medicare doesn’t pay for home health aides to give you personal care unless you are homebound and are also getting skilled care, such as nursing or therapy. The personal care must also relate to the treatment of an illness or injury, and you can only get a limited amount of care in any week. You should not rely on Medicare to pay for your long-term care needs.

Medicare Supplement Insurance

Medicare supplement insurance is private insurance that helps pay for some of the gaps in Medicare coverage, such as hospital deductibles and excess physician charges above what Medicare approves. Medicare supplement policies do not cover long-term care costs. However, four Medicare supplement policies – Plans D, G, I and J – do pay up to $1600 per year for services to people recovering at home from an illness, injury or surgery. The benefit will pay for short-term, at-home help with activities of daily living. You must qualify for Medicare-covered home health services before this Medicare supplement benefit is available.

Medicaid

Medicaid is the government-funded program that pays nursing home care only for individuals who are low income and who have spent most of their assets. Medicaid pays for nearly half of all nursing home care on an aggregate basis, but many people who need long-term care never qualify for Medicaid assistance. Medicaid also pays for some home and community-based services. To get Medicaid help, you must meet federal and state guidelines for income and assets. Many people start paying for nursing home care out of their own funds and “spend down” their income until they are eligible for Medicaid. Medicaid may then pay part or all of their nursing home costs. You may have to use up most of your assets on your health care before Medicaid is able to help.

Long-Term Care Insurance

Long-term care insurance is one other way you may pay for long-term care. This type of insurance will pay or reimburse you for some or all of your long-term care. It was introduced in the 1980’s as nursing home insurance but has changed a lot and now covers much more than nursing home care. There is more information on long-term health care insurance within this section.

Who Needs Long-Term Care?

Long-term care is needed when you have a chronic illness or disability that causes you to need assistance with Activities of Daily Living. Your illness or disability could include a problem with memory loss, confusion, or disorientation (This is called Cognitive Impairment and can result from conditions such as Alzheimer’s disease.).

This year, about 9 million Americans over the age of 65 will need long-term care services. By 2020, that number will increase to 12 million. While most people who need long-term care are age 65 or older, a person can need long-term care services at any age. Forty (40) percent of people currently receiving long-term care are adults 18- to 64 years old.

What Are My Risks of Needing Long-Term Care?

About 70 percent of individuals over age 65 will require at least some type of long-term care services during their lifetime. Over 40 percent will need care in a nursing home for some period of time. Factors that increase your risk of needing long-term care are:

  • Age- The risk generally increases as you get older
  • Marital Status – Single people are more likely to need care from a paid provider
  • Gender – Women are at a higher risk than men, primarily because they tend to live longer
  • Lifestyle – Poor diet and exercise habits can increase your risk
  • Health and Family History – also impact your risk

How Much Care Might I Need?

It is difficult to predict how much or what type of care any one person might need. On average, someone age 65 today will need some long-term care services for three years. Service and support needs vary from one person to the next and often change over time. Women need care for longer (on average 3.7 years) than do men (on average 2.2 years). While about one-third of today’s 65-year-olds may never need long-term care services, 20 percent of them will need care for more than five years.

If you need long-term care, you may need one or more of the following:

  • Care of assistance with activities of daily living in your home from an unpaid caregiver who can be a family member or friend
  • Services at your home from a nurse, home health/home care aide, therapist, or homemaker
  • Care in the community
  • Care in any of a variety of long-term facilities

Generally, services provided by caregivers who are family or friends are unpaid. This is sometimes called informal care. Paid services are sometimes referred to as formal services. Paid services often supplement the services provided by family and friends.

How Do Care Needs Change Over Time?

Many people who need long-term care develop the need for care gradually. They may begin needing care only a few times a week or one or two times a day, for example, help with bathing or dressing. Care needs often progress as you age or as your chronic illness or disability become more debilitating, causing you to need care on a more continual basis, for example help using the toilet or ongoing supervision because of a progressive condition such as Alzheimer’s disease.

Some people need long-term care in a facility for a relatively short period of time while they are recovering from a sudden illness or injury, and then may be able to be cared for at home. Others may need long-term care services on an on-going basis, for example someone who is disabled from a severe stroke. Some people may need to move to a nursing home or other type of facility-based setting for more extensive care or supervision if their needs can no longer be met at home.

Is Long-Term Care Insurance Right For You?

You should CONSIDER BUYING Long-Term Care Insurance if:

  • You want to protect some of your assets and income.
  • You can pay premiums, including possible premium increases, without financial difficulty.
  • You want to stay independent of the support of others.
  • You have significant assets and income
  • You want to have the flexibility of choosing care in the setting you prefer or will be most comfortable in.

You should NOT buy Long-Term Care Insurance if:

  • You cannot afford the premiums.
  • You have limited assets.
  • Your only source of income is a Social Security benefit or Supplemental Security Income (SSI).
  • You often have trouble paying for utilities, food, medicine, or other important needs.
  • You are on Medicaid.

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