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Long Term Care


What is long-term care?

Long-term care is a range of services that people may need to meet their health or personal care needs over a long period of time. Long-term care goes beyond medical care and nursing care to include assistance you could need if you ever have a chronic illness or disability that leaves you unable to care for yourself for an extended period of time. For example, you might need help dressing, bathing, or performing other common daily activities because of a physical impairment. If you have a cognitive disorder such as Alzheimer’s disease, you might need someone to look after you. In many cases, long-term care is provided by family members and friends, but if they are not available or cannot provide all the care you need, paid services may be needed. Care may be provided in a person’s home, community setting, assisted living residence, nursing home, or other facilities.


People over 65: About 70% of people age 65 and over will need some type of long-term care services sometime during their lifetimes, says the U.S. Department of Health and Human Services. Many people will receive care at home, but more than 40% of people age 65 and over will go into a nursing home during their lifetime, and about 10% will stay there five years or longer.

People over 85: The American population is growing older, and the group over 85 is now the fastestgrowing segment of the population. The odds of entering a nursing home, and of staying for longer periods, increase with age. In fact, statistics show that at any given time, 22% of those 85 and older are in a nursing home. Women: Because women generally outlive men by several years, they face a 50% greater likelihood than men of entering a nursing home after age 65.

Middle-aged people: Though older people use the most long-term care services, a young or middle-aged person who has been in an accident or suffered a debilitating illness might also need it. In fact, the U.S. Government Accountability Office estimates that 40% of the 13 million people receiving long-term care services are between the ages of 18 and 64. 2


What does long-term care cost?


The amount you will spend on Long Term Care will depend on the level of services you need and the length of time you need care among other variables.  

For nursing home care: To start with the most costly care setting, one year in a U.S. nursing home averaged more than $80,000 in 2013, and in some regions of the country it can cost twice that amount.

For home care: Home care is less expensive, but it still adds up. Bringing an aide into your home just three times a week (two to three hours per visit) to help with dressing, bathing, preparing meals, and similar household chores can easily cost $1,000 a month. Add in the cost of skilled help, such as physical therapy, and these costs can be much greater.


For assisted living facilities: The average monthly fee charged by assisted living facilities is around $3,000. This includes rent and most additional fees. Some residents in the facility may pay significantly more if their care needs are greater than average

Who pays the bills?


Generally, Medicare does not cover long-term care. People over 65 and some younger people with disabilities have health coverage through the federal Medicare program. Medicare pays only about 12% for short-term skilled nursing home care following hospitalization. Medicare also pays for some skilled at-home care, but only for short-term unstable medical conditions and not for the ongoing assistance that many elders or injured people need. Medicare supplement insurance helps cover some of the gaps in Medicare coverage. Medicare supplement insurance (often called Medigap or MedSupp) is private insurance. While these policies help pay the deductible for hospitals and doctors, coinsurance payments, or what Medicare considers excess physician charges, they do not cover long-term care.


For the most part, people who need long-term care services pay the bills. Planning for this financial risk requires considering different options. Long-term care insurance is one option for protection against much of the financial risk posed by the potential need for long-term care services. Read on to learn more about the different types of protection offered by long-term care coverage.


Where can I get long-term care coverage?

Long-term care insurance is generally available through groups and to individuals. A Group long-term care insurance is sometimes offered through employers, and this type of coverage has become a more common benefit. More than 10,000 employers offer a long-term care insurance plan to their employees, retirees, or both. Individual LTC requires careful shopping as well as a review of your needs on coverage and the cost vary from company to company.


What are the different types of policies?

Several types of policies are available.


A Reimbursement policies are the most common. These policies have a daily or monthly benefit amount, and you are reimbursed for the covered long-term care expenses you incur, up to this amount.


A Per diem policies, including indemnity and disability or cash policies, are also an option. These policies pay a flat dollar amount per day regardless of your actual long-term care expenses.


Qualifying for LTC Benefits:


Functional impairments: A person has a functional or physical impairment if he or she cannot perform a certain number (generally two or three) of activities of daily living (ADLs). The standard ADLs are bathing, dressing, transferring (getting from a bed to a chair), toileting, eating, and continence.


Cognitive impairments: A cognitive impairment is a serious cognitive condition such as dementia or Alzheimer’s disease. Whether an insured individual has an impairment as defined by the policy is generally determined in an evaluation performed by a specially trained health care practitioner.


Long-term care policies cover skilled care provided by professionals such as nurses and therapists. They also cover personal care and supervision of the cognitively impaired, both usually provided by nonprofessional but trained health aides. Most policies cover care in the person’s home, an assisted living residence, and a nursing home. A few older policies cover only nursing home care or only home care. Many policies include other items, such as adult day centers, homemaker/chore services, care coordinators, training for family caregivers, and respite care (temporary paid help to give a family caregiver a break).


What should I look for in a policy?


You should look for a policy that includes the National Association of Insurance Commissioners (NAIC) standards that protect consumers and have been adopted by most states. These standards require:

  • At least one year of nursing home or home health care coverage, including part-time care and help with activities of daily living. Nursing home or home health care benefits should not be limited to skilled care provided by nurses and therapists.

  •  Coverage for Alzheimer’s disease, if the policyholder develops it after buying the policy.

  •  An inflation protection option that offers a choice for an automatic increase of the benefit level every year or a right to increase the benefit level when needed without having to provide evidence of insurability.

  • An outline of coverage that describes in detail the policy’s benefits, limitations, and exclusions, and also allows you to compare it with others. Your company or insurance agent should also provide you with a long-term care insurance shopper’s guide that helps you decide whether long-term care insurance is right for you.

  • A  guarantee that the policy cannot be canceled because you get older or suffer a decline in physical or mental health.

  • The right to return the policy for any reason within 30 days after you have purchased it and to get a refund. A No requirement that the policyholder first:

    • be hospitalized in order to receive nursing home benefits or home health care benefits,

    • receive skilled nursing home care before getting less skilled or custodial nursing home care, or

    • receive nursing home care before getting benefits for home health care.


Something to Consider:


A Some life insurance policies include long-term care benefits. Life insurance policies may have accelerated or living benefits—this means that under certain circumstances, such as a critical illness or the need for long-term care, you can receive all or part of the death benefit of your policy. This is instead of it being paid to your beneficiary after your death. In addition, some relatively new hybrid products combine a life insurance death benefit and longterm care benefits in a number of ways. Keep in mind, no long-term care policy guarantees to fully cover all expenses.

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