Long-term Care Awareness
Long-term Care (LTC) Awareness Month takes place in November. Many Americans are unaware of long-term care insurance policies. Carroll Golden, the executive director of the National Association of Insurance and Financial Advisors (NAIFA) Limited and Extended Care Planning Center, recently presented statistics displaying how many people are unprepared for the cost of long-term care needs. Golden states that only 7% of Americans have acquired long-term care insurance.
What is long-term care insurance?
Long-term care insurance offers financial assistance for those age 65 or older with chronic conditions or disabilities. Furthermore, they cannot care for themselves and require continual supervision. The coverage can include all or a portion of care at assisted living facilities or in-home care. The insurance may pay for a live-in caregiver up to 24 hours a day and seven days a week. LTC insurance can provide different options compared to some government health insurance programs. According to the official Medicare website, “Medicare, and most health insurance, including Medicare Supplement Insurance (Medigap), don’t pay for long-term care.”
Does Medicaid offer the same benefits as long-term care insurance?
There are several differences between Medicaid and Long-term care insurance. LTC insurance is available for those with the resources to pay for it. Medicaid can provide low-cost or free custodial care for low-income individuals. Both options can provide coverage, but it depends on the specific situation. Medicaid is state and federally funded, but operated differently by each state, so you will need to examine your state’s Medicaid regulations to make the best decision for yourself. LTC insurance and Medicaid generally cover nursing-home stays, but not all places accept Medicaid. In a nursing home, long-term care insurance only pays for the costs of a lifetime if you select a benefit level high enough to cover those expenses. Medicaid usually does provide this benefit. LTC insurance can cover in-home care, adult day care, assisted living facilities, and respite care. These options are limited or non-existent in many states’ Medicaid policies.
When should I purchase an LTC policy?
Experts differ on when you should buy a long-term care policy. Some say you should do so between the ages of 45 to 55 but doing so will have you paying premiums for a few decades before ever submitting an insurance claim. Other authorities on the subject say purchasing LTC insurance is best between the ages of 60 to 65, so you can achieve the best blend of monthly affordability and fewer dollars spent.
Long-term care costs can add up quickly. Maeghan Gale, NAIFA policy director, says that a partnership between the public and private sectors can combat the overwhelming expenses. Gale recommends that a public LTC insurance policy could be beneficial and suggests workers pay less than one percent of their income toward the benefit. In Gale’s plan, private policyholders would have the option to not participate in the program.
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