Many American families go into crisis when unprepared for the financial costs and burdens of a long-term health care event. The stress is enormous on the family members who often take the role of caregiver. However, families with Long-Term Care Insurance are getting access to their choice of quality care in the setting they desire.
When an LTC policy is in place, it addresses both the cash flow issues of long-term health care and the family problems created when a loved one needs care.
Long-Term Care Insurance has had—and will continue to have—a positive impact on hundreds of thousands of policyholders and their families. Long-Term Care Insurance's positive impact is already leading to reductions in public expenditures on long-term care services and supports.
The benefits of Long-Term Care Insurance are outlined in a study funded by AHIP, America's Health Insurance Plans, a national political advocacy and trade association.
Over $11 Billion Paid by LTC Insurance in 2019
More Americans are looking to protect their future retirement income and savings from long-term care's financial costs. The results of the study show these plans are doing precisely that. The nation's top long-term care insurance companies paid $11 Billion in claim benefits in 2019, according to the American Association for Long-Term Care Insurance (AALTCI), a national consumer education and advocacy group. But what is the impact?
The study shows that Americans who have a Long-Term Care Insurance policy have a substantial amount of services paid by the insurance. The caregiving services being paid for by Long-Term Care Insurance would otherwise be paid from their own savings and income or be provided by family caregivers. Much of this care is care at home, which most people prefer.
The problem of long-term care has become near a national crisis as America ages. With more Americans living a longer life with advances in medical science, the consequences result in an increased risk of needing extended care.
"The amazing statistic -- and it is still one that's hard for me to get my arms around -- is that 70 percent of people over the age of 65 will need care of some kind, whether in their home or in institutions before the end of their life."Tom Daschle, former Democratic Senate Majority Leader
Your risk of needing long-term health care increases as you get older. With aging, you will notice changes in your health, body, and mind. The financial costs and burdens of longevity impact the American family significantly as often the default caregiver, in the absence of any advance plan, is a daughter or daughter-in-law.
Quality Care and Asset Protection
Most people are concerned about the quality of their future care. People are also concerned about their income and assets and their future lifestyle and legacy those assets are supposed to provide. This is where Long-Term Care Insurance has become a considerable value.
The study shows people with a Long-Term Care policy pay much less out of pocket expenses than those who do not. Since policyholders receive benefits to cover care costs, they pay much less out of their own pockets than those without insurance.
When you own a Long-Term Care Insurance policy, the amount of money drained from your family’s retirement savings is reduced tremendously. LTC Insurance is protecting assets and promoting the lifestyle of the other spouse. Even a small policy would provide asset protection, not to mention reducing the burden otherwise placed on the family.
The study also says that Long-Term Care insurance offers benefits that are not strictly monetary. Insureds may be better able to obtain care in the setting of their choice, including their own homes.
Many people think that Long-Term Care Insurance pays for only nursing homes. Not true. Most policies provide benefits for all types of care at home plus benefits for adult daycare centers, assisted living facilities, memory care facilities, and a traditional nursing home.
Perhaps one of the most significant benefits reported by the study was the fact that LTC policyholders received more care than they would have if they were paying for care with their own money.
"With LTC insurance benefits, policyholders can afford more care; those without insurance may be forced to rely more on family caregivers or simply make do with less care than they really need. We set out to ascertain whether those with insurance, in fact, receive more hours of care than those without. We looked at data from a population of people with insurance who had an impairment (an inability to perform at least two activities of daily living (ADLs) or a cognitive condition) who were receiving home care. For data on non-insured persons with similar levels of impairment."National Health and Aging Trends Study (NHATS)
More Available Care with LTC Insurance
The study shows insured individuals receive substantially more hours of care (35 percent more) than the uninsured. The insured receives almost twice as much paid care but only 10 percent less unpaid care.
This suggests that family members can spend more time with companionship and less time helping their loved ones with daily living activities. When you receive benefits from a Long-Term Care policy, it places less stress on family members and perhaps provides a better quality of care than that provided by an unpaid family member.
Long-Term Care Insurance is very useful in paying or a majority of the costs associated with extended care. An LTC policy safeguards a more significant portion of a policyholder’s assets for either lifestyle needs for them and spouse or partner or for inheritance purposes instead of spending own their savings.
The study does not talk about the federal/state Long-Term Care Partnership Program. Forty-five states currently have active partnership programs in place. This program provides additional dollar-for-dollar asset protection in the event a person exhausts their benefits in a qualified partnership LTC policy. You can learn more about Partnership Long-Term Care Insurance by clicking here.
“We have said the Partnership Long-Term Care program was the best-kept secret because it was created to provide middle-income individuals with a special incentive to purchase coverage.”Jesse Slome, the executive director of the AALTCI
Partnership Policies Offer Dollar-for-Dollar Asset Protection
The 45 states that have partnership plans in place offer these unique policies which provide dollar-for-dollar asset protection. This is known as “asset disregard,” allowing a family to keep assets in an equal amount of the total of all benefits paid by their LTC insurance policy and still qualify for Medicaid long-term care benefits. Most states require a spend-down to $2000 in assets to be eligible for Medicaid long-term care benefits. Even a small policy can provide outstanding asset protection.
The National Association of Insurance Commissioners (NAIC) “State of Long-Term Care Insurance” report in May 2016 suggested expanding the support and promotion of these Partnership Programs between state Medicaid programs and the private Long-Term Care Insurance.
The report also called for more tax incentives for the purchase of Long-Term Care Insurance policies. Some states already have a deduction or credit in place, and federal law allows some people and businesses to deduct the cost of long-term care insurance premiums.
There are several tax incentives available. Learn about them with the LTC NEWS Long-Term Care Tax Benefits Guide.
Maintain your future independence and ensure you will have access to quality care without risking your income and assets by including an affordable Long-Term Care policy in your retirement planning.
LTC Insurance Medically Underwritten
LTC Insurance is medically underwritten, so be sure to start planning before you retire, ideally in your 40s or 50s, when you still enjoy good health.
Every insurance company has their own criteria. Be sure to seek the assistance of an experienced Long-Term Care Insurance specialist who has access to the major insurance companies. A specialist will match you with the right company based on your age and health.
Premiums can vary over 100%, so this is another consideration. You can compare the major companies by clicking here.
You can enjoy peace-of-mind as long as you have a plan. The plans work, and your family will have the time to be family.
About the Author
An LTC News author focusing on long-term care and aging.
Contributor since August 21st, 2017
Being prepared for a future long-term care event will ease the stress and burdens otherwise placed on your family. Without planning, the family faces physical, emotional, and financial burdens. Too many people think health insurance or Medicare pay for long-term health care. The fact is they don't.
A long-term care situation creates both a cash flow problem and a family problem. When you get older, the risk of needing extended care increases. You probably have already noticed changes in your health and body in the past twenty years. In the decades ahead, especially once you reach age 50, you will see many more changes in your health, body, and mind. These changes will often mean you will need help with everyday living activities or supervision due to cognitive decline.
Preparing your family and finances for the impact long-term health care will have is critical to enjoying a successful future retirement. Affordable Long-Term Care Insurance will give you access to your choice of quality care, allowing your family the time to be family.
LTC NEWS Resources Help You Find Solutions
There are many resources available on LTC NEWS that help educate you about the options available to you for safeguard savings and income and reduce the stress on your loved ones.
The Ultimate Long-Term Care Guide is an outstanding resource to review. Plus, you can compare the major Long-Term Care Insurance policies that are available by clicking here. You can obtain free and accurate quotes by clicking here.
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