In the youth obsessed culture of America, the concept of growing old is often thought of as something that happens to someone else. Wrinkles can be avoided with expensive face creams, slack muscles fought off with aerobics and trips to the gym and retirement is just the time to start a second, or even third, career.
The reality of aging, however, is that illness and infirmity can happen to anyone, and the 77 million Baby Boomers now over the age of 45 should start making plans for how to cope if it happens to them. Planning for retirement housing and health care may not be enough. Boomers may also need to plan for someone to help out with personal care when needed.
Why Long Term Care Insurance?
According to the Health and Human Services National Clearing House for Long-Term Care Information website, “70 percent of people over the age of 65 will require some kind of nursing home care services during their lifetime.” This kind of care does not come cheap, with estimates for even minimal help of three times a week for a year coming in at $18,000.
So what is an aging Baby Boomer to do? Many plan to rely on Medicaid to foot the bill if home care or nursing home care is needed. But Medicaid has set rates, so finding a facility to accept it can be a challenge. In addition this program only kicks in once the patient has exhausted all other sources of income.
For those who own homes or have significant incomes or retirement funds they do not want to have to exhaust to qualify, Long Term Care may be the answer. Long Term Care is defined by the US Department of Health and Human Services as, ‘to assist people with support services such as activities of daily living like dressing, bathing, and using the bathroom. Long-term care helps meet health or personal needs.”
Like a car or homeowners insurance policy, most Long Term Care policies involve set payments made on a policy that becomes effective when needed. But instead of replacing a vehicle, Long Term Care insurance provides payment to cover the costs associated with a long term illness or injury that requires in home or nursing home care.
Long Term Care Insurance Policies Vary
Purchasers can find a variety of Long Term Care policies, ranging from single one-time payment plans to plans that require a monthly fee. Some policies are for a single visit to a nursing home while others can cover costs of a nursing home or a home remodel for medically required structural changes. Long Term Care policies even come with inflation riders that ensure payments made today will cover cost demand in the future.
As in most health-related insurance policies, costs for Long Term Care coverage range depending on age, health and habits of the buyer. A younger, non-smoker in good health looking for a basic policy will pay less than an older smoker with health issues who wants a top of the line policy.
When reviewing Long Term Care policies, consumers should take care to read the policy closely to see what qualifies for reimbursement. Policies are designed to cover patients who need assistance with activities of daily living, which can include the ability to feed, bath, walk and in other ways care for self. Some policies exclude dementia related issues, so it is important to clarify if that is a concern.
Who determines when the policy becomes effective needs to be addressed upfront. For example, most policies require at least one, sometimes two, doctors to certify that the patient will need assistance. In addition, many policies require that a coordinator, who often works for the company, makes the final decision on whether or not an incident qualifies.
Long Term Care insurance is not for everyone, and for those with limited income Medicaid may be the best choice. For those with assets to protect, however, Long Term Care insurance may be worth a look. One caveat; while a quick Google search will show many companies that sell Long Term Care insurance, this is a major investment and consumers should seek assistance from a financial planner to choose the plan that works best for them.
Kelly Sharp - Kelly Sharp holds a Master's degree in Education and a Bachelor's degree in Communication, and has been involved in training in a variety ...
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