When we are planning for retirement, it often now includes a discussion of long-term health care. The reality of getting older and seeing changes in our health, body, and mind is hard to ignore, and the consequences on our families and finances are substantial.
However, we usually think of long-term care as permanent - something on the road to the end. New data, compiled by the American Association for Long-Term Care Insurance (AALTCI), shows that not all long-term health care situations are forever. However, you can have multiple events that require you to need extended care services during your lifetime.
Recovery from Long-Term Care Events Possible
In reviewing Long-Term Care Insurance claims, a significant number of people recover and go on to live independently following their period of care.
"One of the more interesting facts just revealed is that almost one-third of home care claimants recover," said Jesse Slome, who heads the AALTCI, a national trade and education group.
Long-Term Care Insurance pays for care when a person requires help with daily activities, including skilled, semi-skilled, and homemaker services due to an illness, accident, or the impact of aging. LTC Insurance also covers supervision due to cognitive decline.
Health Insurance and MedicarePay Limited Amount of Long-Term Care
Traditional health insurance, including Medicareand supplements, pay for a limited amount of skilled services in a facility at some at-home recovery following surgery. What is not covered is long-term custodial care (help with daily living activities or supervision due to dementia). Medicaid will pay for this type of care but only if you have little or no income and assets.
Long-Term Care Insurance is often used when a person needs an extended period of time for recovery, but the care extends beyond the period covered by traditional health insurance.
"Indeed, many times, the need for care can be long, thus the name of the insurance coverage. But it can also be relatively short, and this data shows that indeed a significant percentage of those who go onto claim actually recover and go off claim," Slome said.
Most Long-Term Care Insurance policies waive the premium when a person starts using benefits, and if they recover, the premium starts again. However, premiums are intended to remain level and will not change if you go on claim or your health changes.
Tax-Free Benefits Offer Choice of Care Setting
Long-Term Care Insurance offers guaranteed tax-free benefits that give the policyholder access to their choice of quality care options, including in-home care. However, many consumers are unaware that LTC Insurance pays for desirable home care.
"Many individuals mistakenly believe that most Long-Term Care Insurance claims are for care in skilled nursing facilities. Most care is actually provided in the policyholder's home, which is where they prefer to be," Slome said.
In 2020 the top Long-Term Care Insurance companies paid over $11.6 billion in benefits to policyholders helping them access quality care and giving their loved ones the time to be family instead of caregivers.
Consumers Purchasing LTC Insurance in Their 50s
Most consumers purchase LTC Insurance in their 50s, and premiums are affordable when they are younger and enjoy reasonably good health. Premiums are intended to remain level, and most states have rate stability rules in place to give consumers more peace of mind - Will Long-Term Care Insurance Premiums Go Up? | LTC News.
Long-Term Care Insurance is also custom designed. Many financial advisors or general insurance agents tend to recommend benefits in excess of what is really necessary. Too often, consumers go away thinking Long-Term Care Insurance is unattainable when the opposite is true.
Solicit Input from a Specialist
Experts recommend seeking the assistance of an experienced Long-Term Care specialist who represents the top companies - Financial Advisor or Long-Term Care Insurance Specialist. Who to Use to Get Accurate Information? | LTC News.
Top specialists will have substantial experience and knowledge of available plans, underwriting, and pricing. You can find a qualified specialist by clicking here.
Care is Getting More Costly
The costs of long-term health care services are rising rapidly due to increased demand and labor shortages, increasing the cost of caregivers and facilities. However, costs vary depending on the type of services you need and where you live.
According to the LTC NEWS Cost of Care Calculator, the 2021 national average cost of a private room in a nursing home is now $106,488, but in 25 years, that cost is expected to be $236,541 a year.
However, most care is delivered outside of nursing homes, either at home, adult day care centers, assisted living facilities, and memory care facilities.
The national average cost of in-home care (based on a 44 hour week) is now $53,402 a year, but in 25 years, it will be a staggering $118,621 a year.
Depending on where you live will determine if your cost will be higher or lower than national averages. For example, in Anniston, Alabama, in-home care is now averaging $3,051 a month ($36,608 annually), much less than the national average - Alabama Long-Term Care | LTC News.
However, in Worcester, Massachusetts, that same amount of in-come care averages $5,148 a month ($61,776 annually), much higher than the national average -Massachusetts Long-Term Care | LTC News.
Long-Term Care is More than a Financial Issue - It is a Family Issue
Most professionals, when discussing long-term health care planning, focus on the financial aspect. While that is understandable due to the significant rising cost of long-term care services, money is not the only concern.
If there is no Long-Term Care Insurance plan in place, the adult children usually get placed into the role of being a caregiver. The role of being a family caregiver is physically and emotionally draining. Family caregivers are unprepared and untrained for this job that puts many demands on them and their families.
The benefits from an LTC Insurance policy give loved ones the time to be family instead of being a caregiver. The reduced burden eases the stress on the entire family.
No matter if insurance is in place or not, the family will still have a role. When a person owns an LTC policy, that role is much more diminished, so they have more time to be family. Yet, there may be times a family member will still help out when a policy is in place. However, a policy can help here too.
Respite care is a benefit that is included in most Long-Term Care Insurance policies. The benefit provides short-term relief for family or informal caregivers that is helping the care recipient. Respite care can also stretch benefits in situations where both professional caregivers and family members are being used.
"There are many people who have benefited from respite home care benefits from an LTC insurance policy; this can be a good solution for a family facing care challenges," said D.R. Salerno, Senior Care Advisor for Amada Senior Care in Orange County.
There are many available options for long-term care buy finding quality care is always essential. If your loved one needs care now, LTC NEWS offers detailed information on care options and how best to find care - click here.
LTC NEWS can help you find quality care services and even help you process a Long-Term Care Insurance claim - free and with no obligation - click here.
Whether your need is temporary due to an illness or accident - or permanent because of aging or dementia - affordable Long-Term Care Insurance is the solution.
Don't delay too long as your health can change, making it harder to obtain coverage, and premiums are based, in part, on your age, health, and family history.
Long-term care is both a financial problem and a family problem and addressing it offers peace of mind.
About the Author
Linda is a freelance writer interested in retirement planning, health and aging.
Contributor since October 31st, 2017
There are many reasons people require long-term care services and supports. Health problems from when we were younger can develop over time into a need for long-term health care. Generally, aging and changing health over time increase the risk of needing help with daily living activities or supervision due to cognitive decline.
Once you develop substantial health or mobility issues, the ability to plan for long-term health care diminishes. Long-term care services are costly and get more expensive over time. Being prepared for the costs and burdens of aging is a vital part of an overall retirement plan.
For many people, affordable Long-Term Care Insurance is the solution. Owning an LTC policy means owning a solution that offers you access to your choice of quality care services, including at home.
You can safeguard income and assets, reduce family stress and anxiety, and give loved ones the time to be family instead of caregivers. But the time to plan is before you retire, ideally in your 40s or 50s, when you usually still maintain overall good health.
Research Tools Available on LTC NEWS
LTC NEWS offers many valuable resources to help in your research. You can compare the major insurance companies that offer Long-Term Care Insurance products here - Top Insurers for Long-Term Care Insurance | LTC News.
The Ultimate Long-Term Care Guide is an outstanding read to help you get a good overview of the topic area. There are also available tax incentives, and see if these tax incentives are helpful - Long-Term Care Tax Benefits Guide.
Find all the resources on LTC NEWS - Resources for Long-Term Care Planning | LTC News.
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Reverse Mortgages Can Fund Care or Help You Purchase LTC Insurance
If you - or your loved one needs care now, a reverse mortgage could be an answer. Many people today that have much of their savings invested in their home.
With today's reverse mortgages, you can use the money in your home to fund a Long-Term Care Insurance policy, add retirement income, or even pay for in-home care if you need care now.
Learn more now - Reverse Mortgages | LTC News.
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