Long Term Care refers to a wide array of medical care, personal assistance and social support services for people who are physically or mentally unable to independently care for themselves for an extended period. This care can be provided in a nursing home, an assisted living facility or in one’s home. Individuals who need long-term care services generally require assistance performing certain activities of daily living, such as bathing, moving around (transferring), eating, dressing, toileting, maintaining continence or suffer from cognitive impairment. Generally circumstances requiring long-term care services are caused by accidents, illnesses or most commonly, advanced aging.
Long term care can be one of the most expensive services you will ever encounter. How much it costs is determined on the level and length (duration) of care that one needs. Without a plan, individuals and families can be devastated financially after experiencing a Long Term Care event.
So, what are the odds of needing Long Term Care services?
· According to the Center for Medicare & Medicaid Services a person turning 65 today has a 70% probability of needing some type of long term care services. (Of those needing care, the average duration of care is 3 years.)
· The median cost for a private room in a nursing home today is $91,250/year.
· Medicare only pays for the first 100 days of care. During this time, Medicare pays only for approved charges, only for skilled and rehabilitative care, and only after a 3-day hospital stay.
· Medicaid will pay for required LTC care only when you have low income and assets (i.e. after your assets have been spent down to meet the Medicaid qualifying guidelines.)
So how will you pay for Long Term Care services when needed?
· Government programs: Medicare or Medicaid.
· Personal savings and assets.
· Long Term Care insurance.
Long Term care insurance is designed to help pay for long term medical and non-medical services upon meeting certain qualifications. Generally, needing assistance with 2 or more activities of daily living will trigger long term care policy benefits to start paying.
Some LTC policies cover nursing home care, while others include coverage for assisted living facility, adult day care, hospice and even home care.
Long term care benefits are elected at the time you purchase the policy. The cost will depend on the following: How much you want your daily or monthly benefits to be; how long before the benefits kick in (elimination period); how long you want benefits to be paid once triggered (3 or 5 years is the typical policy benefit duration) and if you want inflation included (increases the benefits each year by a certain percentage). The cost will also depend on the age and health of the applicant at the time of purchase.
By knowing the facts and your risk of needing long term care services, you can better plan ahead and know what your options are.