6 Things You Need to Know about Long-Term Care

6-Things-You-Need-to-Know-about-LTCI-300x168An industry statistic shows the disparity between those who will need long-term care and those who have made plans for the possibility through insurance.

According to the Department of Health and Human Services, 60 to 70 percent of Americans who are 65 years and older will need long-term care. However, a Metlife Mature Market Institute Study found that only 9 percent of Americans own long-term care insurance.

For those unfamiliar with the type of insurance that focuses on long-term care, it pays benefits when a person becomes unable to care or do basic day-to-day task for themselves.

Why the majority of Americans put off planning for long-term care is certainly up for debate, but some of the causes include people’s distaste for considering that they someday might need to rely on another to accomplish basic tasks.

However, not preparing for long-term care can have drastic effects in the future such as ending up with depleted savings due to care-related expenses, according to experts.

To help you understand what long-term care is about, here are six things that’s essential to know. Recognizing these facts will help you prepare for one of the biggest challenges that you can face later on in life. Here are the 6 things you need to know about long-term care.

1. Government programs provide limited coverage for LTC.

Generally, Medicare don’t pay for long-term care, but what it covers is a 100-day stay in a nursing home following at least a three-day stay in a hospital. Medicaid, on the other hand, covers long-term care but on a condition that a person’s assets is not more than a specific limit, which today is $2,000. Also, the two programs offer limited coverage as they only pay for accredited facilities. Home care, on the other hand, is seldom covered by this program.

2. The cost of long-term care is ever increasing.

In 2013, the annual average cost of staying in a private room in a nursing home is $83,950, as per Genworth’s Cost of Care Survey, but for 2014, the annual median cost has escalated to $87,600.

The cost of long-term care is expensive and it’s not showing signs of going down in the years to come. In fact, the five-year annual growth in cost of the different care settings and services are as follows:

  • Homemaker services – 1.20%
  • Home Health Aide Services – 1.32%
  • Adult Day Health Care – 3.40%
  • Assisted Living Facility – 4.29%
  • Semi-Private Room in a Nursing Home – 3.91%
  • Private Room in a Nursing Home – 4.19%

Based from these statistics, an event that warrants long-term care services can easily deplete a lifetime of savings. Since this is the case, you need to determine how your possible care expenses will be covered. Experts say you must investigate how you can become insured under long-term care insurance.

3. Long-term care is not just about nursing homes.

Most long-term care insurance policies issued in the past only covered nursing homes, but today the product has evolved to cover a wide variety of care services because the majority of Americans wants to receive care in their own homes.

Clearly, long term care is not just about nursing homes. In fact, it involves care services given in the home or in other community-based settings. You have a lot of options on where and how you will receive care. It’s just a matter of knowing what these are and deciding which one is best for you and your family.

4. LTCi is expensive, but it can be made affordable.

There are several ways to make long-term care insurance fit to your budget. One is buying coverage while you’re still young, preferably during your 50s. At this point, you can lock in lower premiums as well as discounts for simply being healthy. Purchasing a specific benefit duration can also lower your premiums, as opposed to buying a lifetime coverage. In addition, you can also opt for a longer elimination period (the time before payments begin) in order to lower the cost of your coverage.

5. Family members can provide care, but it also comes with a cost.

Care provided by family members remains a large source of long-term care. More 10 million individuals who are over 50 provide care to their elderly parents, according to government statistics. As family members provide for the care requirements of their loved ones, they also experience financial hardships. In fact caregiving for a loved one resulted to lost wages amounting to $324,000 for women and $283,000 for men.

6. Long-term care is not just an issue for seniors.

Statistics show that 40 percent of individuals who receive long-term care are between 18 and 64 years old. Clearly, even those who are in the younger age groups are still at risk for needing long-term care. It may be due to medical conditions or injuries resulting to physical activities or accidents, but someone does not have to be older to need long-term care.

So, anyone can experience an event that will warrant long-term care services and this is the key reason to plan for long-term care ahead of time.




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