As health awareness increases and medical care improves, we can expect to live longer than any generation before us. As we live longer, the need for care in our later years increases. Illnesses and injury can be prevented, but the odds are we’ll still need assistance with the activities of daily living. Long-term care insurance can be the means to provide the necessary support.
Medical insurance, dental insurance, life insurance and the plethora of insurance types can get very confusing and often overwhelming. Add to this Medicare, Medicaid and Social Security, and you’re likely to implode with too much information.
Well, here is another type of insurance that may very well be one most beneficial in enabling you to remain at home and defer having to move to an assisted living facility. Long-term care insurance is often overlooked when seeking a plan for retirement.
Many people assume that Medicare will provide long-term care. Medicare provides limited benefits that are mainly for brief rehabilitation stays in nursing facilities and limited medical oriented home care visits.
Medicare does not provide for non-medical home care. So please, don’t get upset with your medical home care provider when they explain that they cannot take you to the doctor or run errands; this is not their function.
Below are some points to understand about long-term care insurance:
• Long-term care insurance can provide coverage in the home or in an alternative facility (such as assisted living, adult day care and nursing home).
• Long-term care insurance gives you a choice of provider. You’re not limited to certain government approved facilities. In fact, some policies even allow a trained friend or family member to provide care.
• Long-term care insurance can provide a benefit for life so you won’t run out of coverage. Long-term care insurance protects against catastrophic risk. Many of us will need more than five years of care ($300,000 to $400,000 in today’s dollars). Care for life could cost millions. Depending upon the daily benefit amount you anticipate you may want, you can expect to pay somewhere in the range of $2,500 to $3,500 a year if you are older than 55 years of age.
• The cost of long-term care continues to increase, but long-term care insurance can be bought with increasing benefit to help counteract the effects of inflation.
• Some long-term care insurance policies offer the ability to pay for coverage over a certain number of years so you do not have to pay forever.
• Some long-term care insurance policies can guarantee the premium will not change for a certain number of years.
• The most distinct long-term care risk is that rates exceed that of what you can afford. While insurer companies cannot raise rates on individuals, they may do so on a certain groups of policyholders should they get state approval. It pays to research insurance providers that have sound financial statements and conduct significant business in your state.
• Long-term care insurance is available with certain life insurance and annuity products (if you ever need care, then you can use the money you’ve invested or pass it to your heirs).
• Long-term care insurance offers several tax advantages. Premiums are includable as a medical expense on individual income tax returns. Company-paid long-term care insurance can be deductible by the company and not taxable to the employee. Qualified long-term care insurance benefits are tax-free.
• Long-term care insurance will allow you to maintain your independence without burdening your family.
This is not a solicitation to purchase long-term care, but it is a reminder of the benefits of long-term care, and that the need for significant resources for your care in later life is real.
We receive a tremendous amount of phone calls inquiring about our services from people that are unaware that their health insurance and/or Medicare does not cover the costs.
Don’t wait too long to realize that you may have to burn through your savings to pay for home care.
Perhaps as the patient-centered medical home model becomes more prolific, insurance providers will include non-medical home care to their policies.
If you are not aware of patient-centered medical homes and how they are currently changing the way medical providers collaborate with patients and others within the medical community, then please check out the website http://www.ncsl.org/ and type in “PCMH” to the search window.
Judson Haims is the owner of Visiting Angels Home Care in Eagle County. For more information, go to www.visiting angels.com/comtns or call 970-328-5526.