If you have a long-term care insurance policy you may assume that you are covered if you have to move into an extended living facility or nursing home in your elderly years. Well in most cases this is true; long-term care or nursing home insurance typically will help pay for at least some of the costs of long-term care or a need to move into a nursing home.
Long-term care insurance is designed to assist those that have chronic illnesses, an impairment, or disability who can no longer care for themselves. They need supervision to protect their health and safety and/or they are unable to perform one or more of the “Activities of Daily Living”, or ADL. These include: bathing, walking, using the bathroom, continence, dressing, and eating. Many people needing these services stay for an extended period of time at a nursing home.
What does it cover?
LTC insurance differs from health insurance in that it doesn’t provide regular medical care to help keep you healthy or treat an illness. Rather, LTC is designed to help you maintain your lifestyle and uphold a high quality of life. This is done by providing you with payments for services that ensure you are eating regularly and healthy, taking your medications, attending doctors’ appointments, and having good hygiene.
These payments can be put toward a variety of services to help you improve your quality of life while you suffer from your disability. This may include speech, physical, and occupational therapy; adult day care; rehabilitative care; and 24 hour nursing care either in your home or at a facility.
What does it cost?
Nursing home insurance is helpful in many ways. First and foremost, it can protect your assets so that the family or your spouse can inherit them. Couples sharing assets really can benefit from nursing home insurance. The spouse who does not require nursing home care can face major financial consequences if they do not have the proper nursing home insurance. Without this coverage, it is very easy to lose all of one’s savings during an extended illness or years of needing close medical assistance. Long-term care insurance with the proper nursing home coverage can cover your spouse and protect their assets should either of you need long-term care.
People who need care spend an average of three years at home before entering a nursing facility. If people have a choice, they always prefer staying home rather than entering an assisted living facility or nursing home, which is what long-term care insurance is for. To prolong the need to leave your home, you will need a substantial amount of personal money.
The company, Genworth, has studied the costs of in-home and facility care and have broken it down by state. For example, using the interactive webpage, one can see the annual costs for the following services in Minnesota:
- Home Health Aide: $58.916
- Adult Day Care: $18,720
- Assisted Living, 1 Bedroom: $40,830
- Nursing Home, Semi-Private Room: $83,264
- Nursing Home, Private Room: $88,542
Any assisted living facility or medical facility, whether it is a nursing home or a hospital has a risk factor for getting sued for negligence or poor quality of care. Because of this, nursing homes have liability insurance to protect themselves from being sued. The issue with this to the consumer is that liability insurance has become more and more expensive because of the damages lawsuits can cause. To afford this liability insurance, nursing homes often have to charge more for care. Higher costs for liability insurance means a higher cost of care. Because of the higher cost for care, the facilities have to make cuts, thus quality of care can be reduced, and increasing the number of negligence-related lawsuits. It is cycle that continues to cause issues.
If you have a long-term care insurance policy, you likely are going to have to pay higher premium costs. Medicaid and other health programs for seniors do not cover the full cost for extended stays in long-term care facilities or home based needs. Government programs can be helpful for short-term medical expenses, like doctor visits, prescription medications, and short hospital stays. This is what Medicare covers. It will not cover long-term stays in an assisted living facility, nursing home, or regular in-home care visits. Medicaid will pay for long-term care services, but you need to be in a very low income bracket. The Department of Veterans Affairs also will pay, but you need to have service-related disabilities or be unable to afford the costs of care.
This makes long-term care insurance and nursing home insurance all the more important.
Most likely, you will be one of the 70 percent of American aged 65 and over than will need long term care, in particular, at a nursing home. Don’t wait until it’s too late to purchase or until you have reached an age when the premiums will be too high.
Your long-term care insurance may not fully cover the stays at the facilities either. Most long-term care insurance policies cover about 70 percent of the costs, but your insurance agent will be able to talk you through your specific policy to see what it covers.
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