Long term care can be defined as care provided by another party for the benefit of those who are unable to care for themselves. Generally, long term care refers to the personal care provided on an extended basis to people who need help with certain Activities of Daily Living (ADL's) or who need supervision due to severe cognitive impairment such as Alzheimer's Disease. Care can be provided at home, in the community, in an assisted care facility or in a nursing home.
Some of the reasons for receiving long term care include: chronic disease, prolonged illness, injuries sustained as a result of an accident, disability, or cognitive impairment such as Alzheimer's Disease that limits a person's ability to think or reason.
Who pays for it?
Since the passage of the Health Insurance Portability and Accountability Act (HIPAA) in 1996, it is now clear who is primarily responsible for paying for long term care: YOU.
Long term care services aren't generally covered by most types of insurance, or governmental programs including Medicare and Medicaid.
Most private medical and major medical insurance plans do not cover long term care.
Medicare generally covers some nursing home care, but only for a limited time.
Disability insurance only replaces lost income.
Medicaid pays only for nursing home care after you have spent most of your assets.
That's why many Americans are looking at long term care insurance.
What are the types of care?
A common misperception is that long term care means staying in a nursing home. Today, there are other care options available. Long term care services can be divided into two types of care: home and community care and facility care.
Myth #1:Only the elderly need to think about Long Term Care Insurance.
Reality:Illness or injury can strike at any age and 40% of those who need long term care today are working adults younger than age 65(1).People of any age may need assistance with routine daily activities as the result of a serious injury or illness.Long term care insurance is designed to help them prepare for the possibility of this expense.
Myth #2:I can rely on Medicare or Medicaid to cover my long term care bills.
Reality:Medicare currently pays just 12% of all nursing home costs, and basically provides for those who are disabled and for people who are older than age 65.Medicare only pays limited amounts (for a limited time) for skilled care following a hospital stay of at least three days.Medicaid helps those in financial need and won’t pay for long term care until you’ve depleted your assets below Medicaid thresholds.(3)
Myth #3:Most long term care is received in nursing homes.
Reality:Of those receiving benefits from a long term care insurance policy, 70% do so in a private home or in a community-based setting, such as an adult day care center.(2)
Myth #4:I can save enough to cover my long term care expenses.
Reality:The cost of long term care can add up.The average private nursing home room costs $192 per day or $70,080 annually.(4)The average per year cost for home health aid is $18 per hour.(5)
Myth #5:Disability insurance will cover my long term care expenses if I become disabled.
Reality: Disability income protection insurance is designed to replace a portion of your income should you become disabled due to a covered injury or illness.It is not intended to cover the expense of long term care.
Myth #6:My family can take care of me.
Reality:Are you fortunate enough to have family members close by to help care for you?Families today are leading busy lives – many are two income households with no time to fulfill the role of caregiver.Long Term Care not only protects your investments, but also your loved ones’ day-to-day lives.
Myth #7:Long Term Care insurance is not affordable.
Reality:The younger you are when you purchase LTC insurance, the lower the premiums.There is a benefit to planning early.
(1) America’s Health Insurance Plans (AHIP), “Guide to Long-Term Care Insurance,” 2004.(2) Passing the Trust to Private Long-Term Care Insurance, American Council of Life Insurers, January 2003.(3) America’s Health Insurance Plans (AHIP), “Guide to long term care insurance,” 2003.(4) MetLife Mature Market Institute, September 2004.(5) Ibid.
