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According to the U.S. Department of Health and Human Services (HHS), at least 70 percent of people over age 65 will require some long term care services at some point in their lives. But, what is long term care and how do you know if you need long term care insurance? You can count on LTDT Insurance to help you with this.
What is Long Term Care?
Long term care is care that you need if you can no longer perform everyday tasks (activities of daily living) by yourself due to a chronic illness, injury, disability or the aging process. Long term care includes the supervision you might need due to a severe cognitive impairment (such as Alzheimer’s disease).
Long term care isn’t intended to cure you. It is chronic care that you might need for the rest of your life. This care can span years and can be expensive depending on the type of care you need and location where that care is received. Long term care insurance is one way of helping to pay for these expenses.
What is Long Term Care Insurance?
Long term care insurance is an insurance product which pays for long term care services in many settings, such as at home, a nursing home, assisted living facility, and adult day care facility.
Many people elect to buy long term care insurance so they will not need to deplete their savings should they need long term care services. Long term care insurance can help ensure that financial resources and support are in place when you need them.
Long term care is a complicated issue. The best way to weed out the misinformation about long term care is to learn the facts.
Learn the facts behind the myths:
Myth: I’m Too Young to Need Long Term Care
The Facts: Long term care is not just for the elderly. Nearly 41% of long term care is provided to people under age 65 who need help taking care of themselves due to diseases, disabling chronic conditions, injury, developmental disabilities, and severe mental illness.
Myth: My Family Will Take Care of Me
The Facts: In today’s society, children are more apt to live further away from their parents. In addition, many adult children are taking less vacation time and working longer hours. Taking care of a family member is a time-consuming commitment that often demands a significant number of hours from multiple family members.
Even if family members can find the time to provide caregiving to a family member, it often comes at a tremendous financial cost. Caregiving can cost the average caregiver in lost wages, pension benefits, and Social Security.
While having a family take care of you might be an option, it might be difficult to do without additional assistance.
Myth: Medicare or Medicaid Will Cover My Bills
The Facts: Medicare is generally available for people over age 65 and the disabled. It only pays limited amounts for skilled care following a hospital stay and it is not intended to cover care that assists people with activities of daily living for long periods of time. Specifically, Medicare covers the first 100 days of skilled care in a nursing home after a hospital stay of at least 3 days and as long as you enter a nursing home within 30 days of leaving the hospital. Medicare covers some home health care for the treatment of an illness or injury.
Read more about Medicare at visit www.medicare.gov.
Medicaid is a state-based program supplemented by Federal funds that provides health services to the poor and impoverished. Medicaid might cover you if you meet your state’s poverty criteria and receive care that meets your state’s guidelines.
Many people attempt to “spend down” their assets to state required levels or try to transfer their assets to family members to become eligible for Medicaid. States now have the authority to examine a Medicaid applicant’s past 5 years of finances and impose penalties. (State requirements do vary, contact your state Medicaid office for details.)
Read more about Medicaid at www.medicaid.gov.
Myth: Health Insurance Will Cover My Bills
The Facts: Health insurance rarely covers ongoing chronic care needs. Most health plans, including TRICARE, and TRICARE for Life, are intended to cover skilled, short term medical care as you recover from an illness or injury.
Myth: I Can Save Enough on My Own
The Facts: Paying from personal savings is one way to cover long term care expenses. However, you should consider the cost of long term care services before relying on this method. Here are the current national averages for long term care services:
- $20/hour for a home health aide
- $61/day for care in an adult day care center
- $3,270/month for care in an assisted living facility
- $207/day for a semiprivate room in a nursing home
- $235/day for a private room in a nursing home
Home care—which most people prefer—is generally more affordable than nursing home care but still can be expensive. When averaged nationally, the cost of a six-hour visit by a home health aide is $120. That’s $28,800 per year for a home health aide visiting six hours per day, five days a week.
In 2011, the national average cost of a semiprivate room in a nursing home was $75,555 annually. According to the U.S. Department of Health and Human Services, the average length of stay in a nursing home is 2.4 years. That is more than $181,000 per average stay. Paying for long term care out-of-pocket may be an option for you if you can afford these expenses.
Of course, the figures above are national averages and long term care services may be less expensive or more expensive in your region. Also, each person’s situation is unique and you may save more or less than others. To help provide you with a more complete picture, we’ve developed tools to help you determine how much you would need to save and to find the average cost of care in your region.
The cost of waiting to buy
While many individuals recognize the value of long-term care insurance, many delay their purchase decision without realizing the potential risk associated with waiting. Premiums are directly related to your age and health. The younger you are when you purchase a policy, the lower your premium. Also, if you wait to buy a policy, a change in your health could leave you ineligible for coverage.
By being proactive in your 40s and 50s and purchasing long-term care insurance, you can help reduce the uncertainty of later years and maintain control over important care decisions, your assets, and your family’s future.
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