Long-term care is a major concern of older Americans and their families. Studies have shown Americans rank second in long-term care insurance after saving for retirement by prioritizing financial needs. Unfortunately, many Americans do not want to think about the need for care and therefore cannot plan it. Others mistakenly assume that Medicare or standard health insurance will cover the cost of care. Because of this lack of planning, tens of thousands of Americans are impoverished each year from the cost of long-term care.
The best time to plan long-term care is before it is needed. Think of the need for long-term care when you consider your old-age provision. If you’re already retired, it’s not too late to start planning for a potential care need.
Private long-term care insurance is a good way to finance long-term care. This brochure guides you through the important process of choosing the right long-term care insurance. In this brochure, you will find information on the subject of long-term care benefits, what to look for in long-term care insurance, and a glossary of terms.
Finding a good guideline takes some effort, but it will be worth it. When deciding on long-term care insurance, the following steps must be taken:
1. Talk to your insurance agent or financial planner about whether long-term care insurance makes sense for you.
2. Ask your financial advisor to recommend a company and policy to you.
3. Check with insurance rating services to make sure that the insurance company you are considering is financially secure.
4. Call your state insurance department and ask about the company and its history in your state.
5. Make sure your state agent is licensed to sell long-term care insurance.
6. Review all the details and options of the policy. Don’t just rely on marketing collateral or coverage plans.
7. Make sure you understand all of the terms before purchasing a policy.
8. Ask your insurance agent questions. Consult your State Insurance Commission, Area Aging Agency, or local senior citizen centers for advice. Discuss the guidelines with friends, family, and others whose opinions you respect. Take your time when choosing a policy and don’t be rushed to make quick decisions. And remember: never pay in cash.
Deciding on long-term care insurance is not an easy one, but thorough research and careful planning can now offer you and your family financial security for the future and, above all, security.
Definition of long term care
Long-term care encompasses a variety of nursing, social, and rehabilitation services for people in need of continuous care. Most people in care facilities are older, but many young people need long-term care if they are ill for a long time or have had an accident.
Support with everyday personal needs such as bathing, getting dressed, eating, using the toilet, and taking medication is the most common care service. Nursing facilities also offer qualified nursing and rehabilitation care, which is prescribed by a doctor and supervised by trained medical personnel, such as a state-approved nurse or a therapist.
Long-term care is offered in different settings
Care facilities are the primary facilities for people who need daily or intermittent medical care. For admission to a care facility, you need a doctor who defines the required services in a written treatment plan. Many care facility stays are brief recovery periods from an acute medical event such as a hip fracture or surgery.
Assisted living or nursing homes provide general supervision, housekeeping, medical supervision, and scheduled social, recreational, and spiritual activities for those who are still independent and able to walk. Assisted living does not provide medical care.
Nursing services include qualified nursing, speech, physiotherapy or occupational therapy, health aids for facilities, or support from facility managers. Sometimes family members or carers do most of the care with the help of center assistants and trained professionals.
Many communities have daycare services for adults that provide personal care, specialized care, and recreational services.
Financial problems and dependency
Long-term care costs vary depending on the level of care, care facility, and geographic location. Care facilities, facilities for assisted living, and care services offer different care levels for different residential populations; Therefore the costs are not comparable.
On average, 24-hour long-term care in a care facility costs $ 40,000 per year or $ 112 per day.
Assisted living costs vary widely – between $ 900 and $ 3,000 per month, depending on the size of the room, the amenities offered, and the services required.
The maintenance of facilities can also be quite expensive when needed daily. In 1996, the average care visit from a Registered Nurse (RN) was $ 99. Visits from registered nurses for care in a facility usually last no more than 2 to 4 hours per day, so care is not 24 hours a day.
Eight hours of adult day care can cost an average of $ 45 per day.
Nursing home care: About a third of the cost of nursing home care is borne directly by individuals and their families. Two government programs can pay for part of your care.
Medicare, a health insurance policy for people aged 65 and over, only covers expert care if admitted after a three-day hospital stay (not applicable to HMO membership) and your doctor prescribes specialist care for up to 100 days in a facility prescribing special treatments in your treatment plan. Many people think Medicare is the main payer for care facilities, but Medicare only accounts for 9 percent of care facility spending.
Medicaid, a program for the poor, pays about 52 percent of the country’s care facilities, but only for people who have spent almost all of their wealth and are impoverished. Due to a lack of planning for long-term care, Medicaid is the source of funding for nearly 70 percent of people in care facilities.
Unless you have long-term care insurance, qualify for Medicare coverage under restricted conditions, or become poor, you pay for the care facility’s benefits with your savings.
Assisted living: Around 90 percent of the country’s assisted living services are paid for from private funds. The Supplemental Security Income, Aging Americans Act, and Social Services Block Grants programs pay for some assisted living services, while about a fifth of states allow the federal Medicaid program to pay for some benefit components.
Facility maintenance: private funds cover around 46 percent of facility maintenance costs; Medicare covers 32 percent; Medicaid, 22 percent.
Daycare for adults: For daycare for adults there are some costs out of your pocket; Most funding, however, comes from public sources, either solely from the state or, in some states, from Medicare and Medicaid. Private donations from companies and non-profit groups like United Way also add to the daycare costs.
When to take out long-term care insurance
Since the premiums for long-term care insurance are based on the age at the time you take out the insurance, the younger you are when you take out, the cheaper the annual fee. These premiums stay the same for most policies every year as you get older. If you take out a policy at the age of 55 that costs $ 800 a year, you will still pay the same premium. However, if you wait until the age of 65, the same policy will cost you $ 1,700 per year.
What should you look out for in a policy?
Which insurance is best for you will depend on several factors, including your family arrangements, your financial situation, your preferences for long-term care options, and the level of risk you are willing to accept. There is no best company or policy for everyone. You need to choose a policy that suits your needs.
Before buying a policy, make sure you know what product you are buying and who you are buying it from. Make sure your agent is licensed to sell insurance in your state and has received specific long-term care insurance training. Consult friends, consumer advisors, and information from your state’s insurance advisory program or local agency on aging.