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Long Term Care Insurance
Long Term Care Insurance

Long Term Care Insurance

Long-term care insurance is for those individuals who realize that they may not die quickly. Some of the causes for the use of extended care include Alzheimer’s Diesease, Parkinson’s Disease, emphysema, arthritis, cancer, heart disease, TIA’s, strokes, diabetes, senile dementia, and depression. Accidents should not be discluded from this list of problems.

Why Should You Consider Long-term Care Insurance?

The statistics on the risk of needing long-term care are sobering.Consider these facts:

High Risk: An estimated 40% of all elderly persons will spend some time in a nursing home
High Cost: The costs are high, as much as $40,000 to 80,000 a year, depending on your location, and this cost is expected to double within the next 10 years depending on the area in which you live.
Your Cost: More than half of those who need long-term care will use up their savings within one year.

Why Is There a Need for Long-term Care Insurance?

There is a widespread misconception that “Medicare is going to help.” Of the $60 billion spent annually, Medicare pays less than 2% of nursing home costs and a limited amount of skilled nursing care in a home care situation.

Inadequate Solutions: Medicare and Medicare Supplement insurance does not protect people from spending their savings on long-term care expenses. Medicare Supplement insurance (Medigap) only pays for Medicare deductibles and co-payments.

How much will Medicare actually cover?

Medicare does not pay for any long-term care expenses at all but will cover some limited convalescent skilled nursing care and some limited home health care under restrictive, short-term conditions. Short-term care is typically no more than 100 days. To receive these coverages, certain conditions must be met:

  • You must have been in the hospital for at least three days immediately prior to entering a nursing facility. (This eliminates most Alzheimer’s and Parkinson’s cases.)
  • You must go into the facility for the same condition for which you were previously hospitalized, and must be within thirty days of discharge
  • You must be getting better each day. Once you level off, Medicare stops paying.
  • Medicare covers only Skilled Nursing care and does not cover Intermediate or Custodial care.
  • Medicare pays for hospice care if you’re terminally ill with a life expectancy of 6 months or less, and choose to receive hospice care rather than regular Medicare benefits for management of your illness either in your home or in a Medicare-approved hospice.

These are only some of the limitations of Medicare and Medicare Supplement Insurances. Please refer to your Guide to Health Insurance for People with Medicare provided by the National Association of Insurance Commissioners and the Health Care Financing Amdinistration of athe U.S. Department of Health and Human Services for more details of these limitations.

What about Medicaid?

Medicaid (Welfare) is intended for the poor. To receive Medicaid assistance, income and assets must be virtually exhausted. This means that there is no way to protect your assets. The Insurance Portability and Accountability Act of 1996 makes it a federal crime to “knowingly and willfully” transfer financial assets in order to qualify for Medicaid coverage of nursing home and other long-term care services.

Medicaid Drawbacks

  • If you are single, you must have less than $? in assets and a monthly income of less than $?.
  • Many nursing homes do not accept medicaid patients. When you go on Medicaid you face the loss of choices.
  • Assisted living facilities is the fastest growing setting for quality care today, and is generally not accepted by Medicaid.
  • Individuals cannot hide assets. A 60-month look-back audit closes the loopholes to qualify for medicaid.
  • Government recoups medicaid loses from the estate, with no penalty cap

Is Long-Term Care Insurance the Solution?

Yes! If it makes sense to you to own a policy that does what you want it to do and with affordable premiums, consider Long-Term Care Insurance to protect your assets and protect your spouse and family. A recent survey of seniors who purchased long-term care insurance indicated 6 main reasons why they bought long-term insurance.

BURDEN

Most people don’t want to be a burden on their spouse, kids, relatives, friends, etc. This burden is both financial and emotional, resulting in heart-felt guilt.

ACCESS TO QUALITY CARE

Some people realize that the quality of care available under welfare can be less than private pay care. Quality nursing homes tend to favor private pay patients for admissions. Private pay coverage gives a family more freedom in choosing a quality facility that is convenient and nearby, when the time comes for their loved one to be placed in a nursing home.

ASSET PROTECTION

Everything an individual worked for can be wiped out by nursing home costs. A lot of people would rather have their home, life savings, and other assets go to their family or charity, instead of going to a nursing home.

CONTROL AND INDEPENDENCE

We are used to making choices in our lives. We choose where we want to live, what kind of car we drive, who our doctor is, etc. Most people wish to maintain control, rather than relinquishing it to welfare.

AVERSION TO WELFARE

Some people don’t want to be dependent on the government for care. They feel welfare is for the truly needy, not for people trying to hide their assets in order to qualify. It is a federal offense to hide your assets in these circumstances.

PEACE OF MIND

The peace of mind offered by quality long-term care insurance is immeasurable. Being able to go to bed at night knowing one is protected, instead of worrying about what to do if something happens, is a feeling most people desire.

Consider the risks

If you are like most seniors, long term-care costs are the only major catastrophe left with no plan. Most people have insurance coverage for these items to avoid financial disaster:

Odds for using your coverage
Coverage – Odds:
Home fire & damage 1 in 1200
Automobile damage & liability 1 in 250
Medical Insurance 1 in 15
Long-term care 2 in 5

Now that you understand the financial risks, ask yourself
“Why haven’t I considered coverage for long-term care insurance.”

Long-term care insurance is affordable and can be purchased without affecting your lifestyle or depleting your life savings. Rates for insurance depends on age, health, and amount of insurance you wish to purchase. Long-term insurance has tax advantages as well. We all have insurance that covers our home, automobile, and general medical expenses. The biggest risk not covered is major catastrophic, long-term medical problems.

Do you have a plan?

Source: Gay and Lesbian Insurance Services

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