Do you have homeowner’s insurance to protect your home in case of a fire? Chances are you do. It’s a very scary thought and – wisely - very few people think twice about protecting themselves against such a possibility.
OK, next question… Do you have long term care insurance (LTCI)? There’s a good chance that your answer is no. Recent statistics show that less than 8% of U.S. adults and about 10% of seniors have long-term care insurance. And yet, nearly 10 million people in the U.S. (37% under age 65 and 63% over age 65) needed some form of long-term care in 2000 (see http://longtermcare.gov/ for more information). It’s estimated that almost 70% of people turning age 65 will need long-term care at some point in their lives.
Bottom line… Your chances of needing to make a claim for long-term care are considerably higher than making a claim for a fire.
LTCI helps pay the cost of care for seniors or individuals with disabilities if they should ever need it over a long period of time. It helps pay for the cost of care for individuals unable to perform the basic activities of daily living (ADLs) -- such as bathing, eating, getting in and out of bed, dressing, and going to the bathroom – over a long period of time.
Depending on the policy, LTCI may cover home care, assisted living, adult daycare, respite care, hospice care, nursing home, and Alzheimer's facilities. Certain policies will pay for a visiting or live-in caregiver, companion, housekeeper, therapist or private duty nurse.
The cost of an LTCI policy is based on:
According to the U.S. Department of Health and Human Services, in 2010 the average cost for long-term care was more than $6,000 per month in a nursing home, more than $3,000 per month in an assisted living facility, or $19-$21 per hour for a homemaker or home health aide.
One of the biggest misconceptions about long-term care is that it’s covered by Medicare. Medicare only pays for a maximum of 100 days if you need skilled services or rehabilitative care in a nursing home. It does not pay for non-skilled assistance with Activities of Daily Living (ADL), which make up the majority of long-term care services.
Medicaid pays the largest share of long-term care services, but only applies if your income is below a certain level and you meet minimum state eligibility requirements.
Other federal programs such as the Older Americans Act and the Department of Veterans Affairs pay for long-term care services, but only for specific populations and in certain circumstances
More and more people are purchasing LTCI to protect themselves in the event that they need long-term care. Some of the benefits include: