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Long-Term Care Insurance: Frequently Asked Questions

Many people mistakenly think their health insurance or Medicare will pay for any long-term care services they may need at some point. But health insurance really only pays for doctor and hospital bills. If you develop a chronic illness or become disabled and are unable to care for yourself for an extended period of time, you'll need long-term care services. And these services aren't cheap. Full-time nursing home care averages $69,000 to $78,000 per year or 8 hours per day of home health care can cost $43,000 to $70,000 annually.

Who Needs Long-Term Care Insurance?

If you can afford long-term care insurance, you should probably consider it. Why? Because the cost of long-term care, should you need it, can quickly deplete your life's savings. While financial considerations cannot be understated, long-term care insurance isn't only about money. It's also about peace of mind. Having it ensures you'll have access to first-rate care when you need it. It also means you won't have to be dependent on others or be a burden to your children.

How Do I Get Protection?

The best way to ensure that you'll have access to high-quality long-term care services is to have long-term care insurance coverage. There are two main ways to get coverage - buy it on your own or obtain it through an employer-sponsored insurance program that your company may offer.

Some benefits also are available from the government, through Medicare and Medicaid. However, you should be careful about relying on government programs. Medicare covers only short-term skilled nursing home care, and Medicaid will pay for your care only if your assets are very limited. Some states have Long-Term Care Insurance Partnership Programs that allow you to buy private long-term care insurance and remain eligible for Medicaid benefits if your private insurance runs out.

When Should I Buy a Policy?

As with most kinds of personal insurance, the younger you are when you purchase long-term care insurance, the lower your premiums will be. Once you own a policy, premiums generally don't increase with age, unless an insurance company raises them for a whole class of policyholders.

If you can't buy as much coverage as you think you need, consider buying an affordable plan now and enhancing it later when your financial situation improves.

What are the Types of Care?

Long-term care insurance pays for a wide range of services and procedures that typically aren't covered by a person's medical insurance. The types of care fall into three categories: skilled, intermediate and custodial.

Skilled

If you have a serious illness or injury that you can recover from, you will probably receive skilled care from nurses or professional therapists. Skilled care is provided daily, usually ordered by a physician, and involves a treatment plan. In short, skilled care helps get you better.

Intermediate Care

This type of care is the same as skilled care, but not provided on a daily basis. For instance, if you injured your leg and need to visit a physical therapist five times a week to help you heal, that would be considered intermediate care.

Custodial Care

Unlike skilled and intermediate care, which is used to improve your health, custodial care isn't intended to get you better. Instead, custodial care includes assistance with daily activities like bathing, eating, dressing, toileting (getting on and off the toilet and other tasks associated with personal hygiene), continence and transferring (getting in and out of bed and chairs). Catheter or colostomy drain are other examples of custodial care. Custodial care can range from in-home care provided two or three days a week, to 24-hour nursing home care.

Where is Care Delivered?

Many people mistakenly think long-term care is synonymous with nursing home care. A nursing home is a good example of a facility that provides long-term care services, but it's just one of the many settings in which long-term care is delivered. In many cases, care is provided in the home often by a visiting nurse or a home health aide. Long-term care services are also provided in places like assisted living facilities and adult day care centers. Because long-term care insurance policies may differ in what they cover, it's important to be familiar with the different locations where you can receive care.


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