Long term care insurance is an important part of financial planning especially as you near retirement. Below is an article from Samantha Stein of ALTCP.org regarding whether some long care concepts are fact or fiction. A big thank you to Samantha for this informative article.
Long term care is a vast topic to explore. Often, people can get overwhelmed with the amount of data present online, that planning for their own care turns into this terrifying task to accomplish. To reduce the confusion that surrounds, the following was put together by ALTCP.org has created a long term care insurance consumer guide which aims to assist individuals planning for their future care needs.
However, to start the discussion about this type of coverage, we have gathered facts and figures about long term care floating around on the Internet. Let’s decipher which among these are actual facts and works of fiction.
Most people will not need long term care. It is for individuals with illnesses only:
Verdict: Fiction. According to the US Department of Human and Health Services, 70% of people will need long term care services after turning 65. Younger individuals could also need these services because of disabilities, serious illnesses, or injuries. These cater to the custodial needs of people who cannot perform the activities of daily living independently.
Furthermore, care assistance is not just for people who get sick and would need assistance in recovery. The elderly also find themselves needed these services because of limitations brought about by old age.
Long term care means staying in a nursing home.
Verdict: Fact, but it depends. Yes, long term care may include nursing home care, but it is not limited to that. More importantly, it does not automatically mean that you will be sent to a nursing home.
As the primary objective of this type of care is assistance with daily life activities, individuals can receive the services they need in other facilities or even their own homes.
Long term care costs can be covered out of pocket.
Verdict: Fact, but it depends. Long term care rates have been continually rising over the past few years. Because of that, people are having troubles with how they could cover these expenses.
Self-funding is possible, but you would need substantial savings and assets to pull it off successfully. Many end up relying on family members to provide the care that they need because they have found that their savings were not enough to pay for the care.
Medicare and Medicaid do not pay for long term care.
Verdict: Fact and Fiction. One of the biggest misconceptions Americans have about Medicare is that it covers long term care services; it does not. Medicare focuses on the medical needs and health stability of a person instead of the custodial care itself.
Medicaid, however, does cover some long term care services, but it caters to the needs of people older than 65 and younger individuals with specific diseases and disabilities. Moreover, this program enforces specific health and financial requirements. To qualify, many would have to spend down on assets.
Long term care is not included in health insurance.
Verdict: Fact. Health insurance helps pay for medical expenses, check-ups, doctor visits, and hospital stays. This type of coverage focuses more on the health-related aspects and costs. Long term care would only be covered by the long term care insurance and by Medicaid for some cases.
You should only buy long term care insurance when you are older because you will not need it until then.
Verdict: Fiction. You must prepare for long term care years before they need it. Moreover, if you purchase long term care insurance earlier, you would be able to pay lower premiums.
Lastly, younger and healthier applicants are eligible for good health discounts. With the high costs of care, these discounts could be a lifesaver, right?
Samantha Stein is an online content manager for ALTCP.org. Her works focus on long-term care information that covers long term care insurance, financial planning, elder care and retirement. In line with the organization’s goal, Samantha creates content that helps raise awareness on the importance of having a comprehensive long-term care plan not just for the good of the individual but for the safety of the entire family.
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