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Do You Need Long Term Care Insurance?

By Compuquotes Team on March 27th, 2008

Long Term Care

According to the most current statistics, 42% of Americans who are 65 years old today will need nursing home care at some time in their lives. As medical science increases our lifespan, and families are flung further and further apart geographically, the possibility that you may someday need long term care grows astronomically. While it's never pleasant to contemplate a future in which you may become dependent on others for care and assistance with daily living, the possibility is a reality, and planning for it ahead of time can make your life far simpler when and if that day comes.

The Cost of Long Term Care

The average annual cost of nursing home care varies depending on where you live. If you live in the Boston areas, for instance, you can expect to pay $89,000 a year for nursing home care. Assisted living will cost you or your family around $35,000 annually, and home health care for four hours a day will cost you about $27,700 a year. Some of those costs may be covered by Medicare or Medicaid - but only if you fit the qualifications to receive the long term care benefit.

Will your retirement income cover those expenses? Many people mistakenly assume that their Medicare coverage or Medicaid will cover the costs of long term care if they need it in the future. Unfortunately, many find that they don't qualify for long term care benefits under either of those programs. The truth is that Medicare and Medigap don't pay for much long term care at all.

Resources that Help Pay for Long Term Care

  • Most elders patch together their long term care plans from various sources, including unpaid assistance from family and community, community services that are specific to their own communities, VA services and Medicare/Medicaid, as well as through private sources like long term care insurance. Here's a quick breakdown of the assistance you can expect from various sources.
  • Medicare will pay for rehabilitative services in a nursing home or rehabilitation hospital after a related hospital stay. For instance, if you fall and break a hip, Medicare will pay for up to 100 days in a rehabilitation hospital to help you recover physically and adjust to any new limitations. It will also pay for intermittent skilled nursing or therapy in your home if you require it to stabilize your condition. Finally, if you are diagnosed with a terminal illness, Medicare will pay for hospice care.
  • Medicaid is an income qualified benefit. You must meet income eligibility guidelines in order to qualify, and will be restricted to the services which your state's program agrees to pay. In most cases, Medicaid will pay for nursing home care, and under some circumstances, for in home care.

Veterans Affairs (the VA Administration) will pay for long-term care for veterans with service related disabilities. It may also pay for long term care for veterans who do not have service related disabilities, but who are income qualified for assistance.

  • Long term care insurance is designed to cover the costs of long term care if you should require it. Depending on the policy that you purchase, it may pay for full nursing home care, assisted living care or in home medical and assistive care so that you can remain at home.
  • Reverse Mortgages are another way that you can pay for your long term are if you own a home and are not planning to pass it on to your children. There are legal guidelines and standards for reverse mortgages.

You Should Serious Consider Long Term Care Insurance if:

  • You want to preserve your assets for your family.

You are not likely to qualify under income guidelines for Medicaid.

  • You are not permanently disabled with a service related disability.
  • You want some control over where and how you will be cared for in the long term.
  • You want to pass your family home on to your children or have another reason for rejecting a reverse mortgage.

You can afford the premiums.

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