Long-Term-Care Options
Your Options
How would you pay for care if the need arises? What are your options? It’s important to consider all options and resources available to you for long-term care assistance.
Family
Family members often take on the responsibility of caring for a loved one. Care from a family member is not usually the planned option, but rather the result of a sudden need. Given the option, many would prefer that the family was there for support, not as primary care providers.
Disability Income Insurance
Disability income insurance is designed to replace lost income and pay for everyday expenses, such as your mortgage and bills, but is not specifically designed to provide the funds for the additional cost of long-term care services.
Medicare and Health Insurance
For most Americans, Medicare becomes your health insurance at age 65. It is designed to pay for medically necessary skilled care for acute, short-term conditions such as broken bones, emergency surgery or a heart attack. Chronic medical conditions evolve over longer periods of time and generally require non-skilled and non-medical care. “Medicare and most health insurance plans, including Medigap (Medicare Supplement Insurance) policies don’t pay for this type of care, also called ‘custodial care’.”1
However, under Medicare Part A, if you meet certain criteria after being discharged from the hospital, skilled nursing facility services may be covered – up to 100 days, 100% for the first 20 days. From 21-100 days, Medicare requires a co-payment. Medicare will be paid in each benefit period.
Medicaid
Medicaid2 is a state-administered government-funded program that pays health care expenses for low-income individuals. If eligibility requirements are met, Medicaid can pay for nursing facility and limited home health care services. The recipient must meet the state’s eligibility requirements.
Your Income and Assets
Assuming an estimated annual cost of home health care of $84,680 in 2008 and rising at the rate of 5% per year due to inflation, to pay for an average claim a 55 year-old would need to accumulate $2,000,000 by the time he or she reaches age 85.
Source of cost of care is Long Term Care Group, Inc.
Long-Term-Care Insurance
Only long-term care insurance is designed to reimburse some of the costs of receiving various levels of care for chronic conditions. Owning a long-term care insurance policy provides you options in deciding where or how you receive care and how much and what type of care you can receive in either:
- Your home
- The community
- Adult day care centers*
- Alternate living facility*
- Nursing home
Long-term-care insurance can help to:
- provide funding for potential costs and should be considered an integral part of your retirement plan.
- preserve your income and assets by helping pay for your care through your policy, and not out of your pocket.
- fit a wide range of your needs and budget. The earlier you include long-term care insurance in your overall plan, the lower your premium and the higher the likelihood you will medically qualify for the coverage.
1 “Medicare and You 2010,” Department of Health and Human Services, 2010
2 Also referred to as Medi-Cal in California, MassHealth in Massachusetts, and TennCare Medicaid in Tennessee.
Note: Certain state insurance departments require variations in terminology to some policy features. The new terms for the features do not change how the features operate. Such changes may be “Adult Day Health Care Centers” or “Adult Day Care Facilities” replacing “Adult Day Care Centers,” “Assisted Living Facilities” replacing “Alternate Living Facilities,” or “Residential Care Facility” and “Lifetime Maximum Dollar Amount” or “Maximum Lifetime Benefit” replacing “Benefit Account Value.”
*Also known as Residential Care Facilities (California only) or Assisted Living Facilities.