Long Term Care Facts

Long Term Care services are designed to assist someone who has lost some or all of the ability to care for himself or herself due to an illness, an accident or simply the effects of aging. Long Term Care includes a wide range of services which help people maintain the normal activities of daily living - like bathing, dressing, eating, grooming, handling items, and transferring (moving from a bed to a chair or from a chair to standing, etc.). Long Term Care services can be provided in your home, in and through community resources or in a formal setting such as a nursing home or assisted living facility.

What is Long Term Care Insurance?

Long Term Care Insurance provides funds to help you cover long-term care costs in the same manner Health Insurance provides financial coverage for doctor's visits and hospital bills. However, it is very important to understand that Long Term Care Insurance and Health Insurance are two distinctly different types of insurance. Health Insurance coverage applies to sicknesses and illnesses from which the insured is expected to recover; these are typically known as acute conditions. But will Health Insurance provide benefits for someone who suffers permanent paralysis from an accident or stroke? For someone who develops Alzheimer's? Or for someone who simply becomes less independent as a natural result of the aging process and requires long-term assistance?

Health Insurance will likely provide coverage for doctor visits, hospitalization, and maybe even some prescription medicines. But if an individual's condition requires long term nursing, in-home care, or the resources of an assisted living facility, Health Insurance will likely not provide coverage.

Long Term Care Insurance has been designed to pick up and provide coverage where Health Insurance fails. When an individual's condition requires long term medical care, supervision, or assistance carrying out the activities of daily living, long term care insurance provides funds to cover the long-term expenses.

Those who have purchased long term care insurance find that it helps maintain their independence, and provides the freedom to choose how and where care services are provided. Long term care insurance protects assets and ensures that long term care needs do not create mental, physical, and financial burdens on your family. 

Will I Need Long Term Care?

Statistics show that 70% of the US population reaching 65 will need long term care at some point in their lives. Of those needing long term care, 41% will be under 65. For comparison, the likelihood of a home being destroyed is 0.012%, but who would take the risk of not insuring their home against loss in a catastrophic event? 

A chronic health event or disabling accident can be extremely devastating financially because the costs are open-ended. Often there is no way to tell when care will no longer be needed. It could be a few months — or many years.

Could you write a check for $7,000 this month if you or your spouse needed care?  Could you write a check for $7,000 a month for 6 months?  What about one year? Two years?  After only two years you will have spent $168,000. Long term care insurance transfers all or part of that risk to an insurance company. When you purchase long term care insurance you are securing a pool of money to draw from when you need it, and if you choose inflation protection, that pool will grow over time.

Won't Medicare Pay For Long Term Care?

The following criteria must be met in order for Medicare to pay for any of your long-term care bills.

• You must have a hospital stay of three consecutive days (not counting the day of discharge).
• You must be admitted to a nursing facility for the same illness you were hospitalized for within 30 days of discharge.
• Medicare covers only skilled care or rehabilitative care given in a certified skilled nursing facility or in your home. Assistive in-home care is not covered when that is the only kind of care needed.
• You must be certified by a medical professional to need skilled nursing or rehabilitative services daily.

How Much Will Medicare Pay for a Skilled Nursing Facility?

• Days 1-20: Medicare pays 100%, provided that you are receiving daily skilled care.
• Days 21-100: You pay the first $124 per day, and Medicare will pay  the balance.
• Days 101+: Medicare pays nothing.

Finding The Right Product

Unlike a life insurance policy, There are several “moving” parts to a Long Term Care policy.  You have the flexibility to make choices, and these choices affect the premium.

Some basic choices are:

• Facility Daily Benefit  - amount of dollars per day you receive to pay for care in a skilled nursing facility. The average cost per day for 2011 was $235.
• Facility/Home Care Period – this period is stated in number of years.  The average stay in a facility nationwide is 3 years.
• Home Care Daily Benefit – amount of dollars per day available to take care of you at home. The average cost of non-skilled in-home care is about $25.00 an hour.
• Inflation Protection – as health care costs continue to rise with no sign of letting up, this feature is highly recommended.
• Elimination Period – how many days you can afford to pay for a facility before the policy takes over. People often choose periods from 0 to 180 days.

We represent major insurance companies that:

• Are committed to the long term care industry
• Have been in the industry for 15+ years (Long Term Care insurance is a relatively new offering)
• Have a track record of paying claims
• Offer complete coverage
• Are client-friendly