Long Term Care Insurance

Long Term Care Insurance

Educate Yourself

You may request a consultation which is offered by MEA Financial Services partner, ACSIA Partners LLC.  For more information, click here.  You will also find a plethora of information on the Internet on all aspects of long term care, information from providers, insurance companies, government websites and information published by special interest groups.   You will also learn about future plans of special interest groups that lobby to make a difference in the availability, cost and quality of long-term care and long-term care insurance.

Although studies have shown that Americans rank long term care second behind saving for retirement when prioritizing financial needs, unfortunately many do not take action. Many find it unpleasant to think about needing long term care or hesitate to spend the money for the coverage. Therefore, most fail to plan for future care needs or wrongly assume that Medicare or standard health insurance policies will cover the costs of long term care services. As a result of this failure to plan, tens of thousands of Americans are impoverished each year by the costs of long term care.

The time to plan for long term care is before it is needed. Private long term care insurance is an excellent way to finance long term care.  

·        Talk to your insurance agent or financial planner about whether long term care insurance makes sense for you.    

·        Ask your insurance agent or financial advisor to recommend a company and a policy.

·        Check with insurance rating services to be certain the insurance company you are considering is financially secure.

·        Call your state insurance department and ask about the company and its record in your state.

·        Make sure your insurance agent is licensed to sell long term care insurance in your state.

·        Review all the details and options of the policy. Do not rely just on the marketing materials or outline of coverage.

·        Make sure you understand all the provisions before you purchase any policy.

·        Shop around for the best price and the coverage that best meets your needs.

 

Ask your insurance agent questions. Seek guidance from the state insurance commission office, the Area Agency on Aging, or local senior centers. Discuss policies with friends, family, and others whose opinions you respect. Take time when choosing a policy, and don't allow yourself to be pressured into making quick decisions. And remember...never pay cash.

 

What is Long-Term Care?

Glossary: Benefits, Options & Terms

Request a Quote for Long-term Care Insurance

Long-term care services include both medical and non-medical care. Individuals require long-term care when a chronic condition, serious injury, stroke, or illness limits their ability to carry out basic daily care tasks and household chores, which are frequently referred to as "activities of daily living". It's important to understand that long-term care is not limited to the elderly. An estimated 12.8 million Americans of all ages need assistance from others to carry out everyday activities. Approximately 57% are persons aged 65 and older, 40% are adults aged 18 to 64 and 3% are children under age 18. For adults reaching age 65 it is expected that 40% of those individuals will require some type of long term care and another 10% of our population will need long-term care sometime during their lifetime. More than 70% of the people receiving long term care benefits choose to receive their care at home from family or friends.

The 2011 national average daily cost of a nursing facility for a private room is $235.00 daily and for a semi-private room is $207.00 daily. An Assisted Living Facility's monthly cost averages $3,270 monthly and Adult Day Care runs approximately $61.00 per day. A Home Health Care Aide is approximately $20.00 per hour.This equates to an annual tab for a semi-private room at around $75,555 for a national average. Costs vary from state to state. Some of the highest costs are in the East, and Alaska has the highest average daily cost. Studies show that nursing home prices have increased faster than inflation, however they have remained relatively stable in the last few years. One can easily see how even a short stay in a nursing facility can quickly wipe out a family’s assets.

Cost for care greatly vary depending upon where you live or where you plan to live when you retire. The cost of care will continue to rise due to the steady increase in medical costs and medical liability costs, as well as, the cost facilities incur to attract and keep quality staff by providing competitive wages and benefits. Additionally persons entering nursing homes today are in poorer health and have less stamina than patients in the past...and people are living longer, but as a result many need assistance or medical treatment longer. The U.S. Census Bureau shows that the fourth fastest growing population in the U.S. are those age 90 to 94. This group has increased by 44.6% since 1990. Most nursing home stays are of short duration, the average being 2 1/2 years and 90% of nursing home stays are less than 5 years. However, do keep in mind that these averages are based on actual stays in a long-term care facility and do not take into account how long an individual may have been hospitalized or cared for at home.

Medicare and Medicaid

Medicare

Generally Medicare does not pay for long-term care services. Most long-term care is to assist people with support services such as activities of daily living like dressing, bathing, and using the bathroom. Medicare doesn’t pay for this type of care called "custodial care". Some Medicare Advantage Plans (formerly Medicare + Choice) may offer limited skilled nursing facility and home care (skilled care) coverage if the care is medically necessary. You may be required to pay some of the costs. For more information about Medicare Advantage Plans go to http://www.medicare.gov and select Plan Choices in their navigation column.

For more information request the guide book "Choosing a Medigap Policy: A guide to Health Insurance for People With Medicare" developed by the Centers For Medicare & Medicaid Services provided "free" by request from most companies offering long-term care insurance or order it here "Send Me Information".

Medicaid

Medicaid pays for nursing home care and may also pay for some community based services. However, to receive Medicaid assistance, you must meet federal poverty guidelines for income and assets and may have to "spend down" or use up most of your assets on your health care. State laws differ about how much money and assets you are allowed to keep once you become eligible for Medicaid. Many nursing homes have dropped out of the Medicaid program leaving long waiting lists and limited choices at those remaining.

Why You Should Consider Long-term Care Insurance

To protect your life savings and maintain control of your retirement money. So you may maintain your independence and freedom through choice of where you want to live when the need for long-term care arises. Long-term care insurance can relieve the burden from family so you and they won't have to worry that they do not possess the training and skills necessary to help you with your long-term care needs.

Most individuals prefer to receive long-term care at home for as long as possible or to reside in an assisted living arrangement rather than going into a nursing home. A policy with a home care and assisted living benefit can pay for services received in these environments, such as, assistance with the "Activities of Daily Living," or if eligible, services like cooking, cleaning and shopping. Additionally, if it is determined that you require services provided by a licensed professional nurse or therapist, you could also receive benefits for help to improve your mobility and strength as well as hearing and speech therapy.

Purchasing a long-term care insurance policy is not something you do just for yourself...it involves family…giving those you love the financial support, choice and peace of mind when long-term care is needed. Researchers agree that the number of non-elderly persons with long-term care needs has grown in recent decades and that this is likely to continue and that the cost of long-term care will continue to escalate and to likely triple within the next 20 years.

Selecting A Long-Term Care Insurance Company

The right policy for you is a policy where the benefit you may receive and the premium you are paying fits your financial plan.

  • Most persons consider a nursing home a last resort. If this is your view, then make certain the policy you are considering includes home, assisted living and adult day care and select coverage at least equal to or no less than 80% of the nursing home care benefit.
  • Daily benefit plans can range from $50 to $500 per day and monthly benefit plans up to $15,000 per month. Be certain to purchase an inflation protection rider. The 5% compound rider will work best at keeping your benefits in line with rising costs. However, if you are age 75 or older when purchasing long-term care insurance the inflation rider is not recommended.
  • If you intend to finance part of your long term care and do not have prescription drug coverage, be sure to factor this and other care related cost into your overall expenditure.
  • You should purchase a policy that provides benefits for a minimum of two years. Longer terms provide more security, but purchase only what you can afford.
  • Elimination periods can save premium dollars, but be certain to factor this cost into your budget, as you will be responsible for costs during this period. The policy should provide that you need only satisfy the elimination period once in your lifetime.
  • Make certain the insurance company you are considering is financially sound. Check the rating services for A- or better rated companies.
  • Check with your state's insurance department for any complaint history or history of rate increases. 

When To Buy

Premiums vary depending upon your age and health status when you apply for coverage. Other factors that affect cost include what you decide on for a daily or monthly benefit and if you select any of the riders that are available that enhance or broaden the coverage. As you must be in generally good health when applying in order to pass the company of choice's underwriting, it may be wise to purchase long-term care insurance at a younger age when health may be better and premiums are lower.



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