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Long Term Care (LTC) can be purchased on a group basis or through an individual plan. According to a recent study published in the New England Journal of Medicine:
- For a man over 65, the odds are 1:3 or 33% that he will need LTC in his life
- For a woman over 65, the odds are 1:2 or 50% that she will need LTC in her life
- Women are more likely to need LTC because they live longer
Nobody wants to go to the nursing home. Most people prefer to receive care at-home as long as it's affordable and appropriate. After that, most people prefer to reside in an assisted living arrangement rather than in a nursing home. It helps to have insurance pay for this non-institutional care, to support at-home care as long as possible.
Statistics show that there is nearly a 50% chance that, due to medical conditions, a person will eventually end up requiring 24-hour skilled nursing care in a facility.
Some Frequently Asked Questions:
Q: What is long term care?
Long term care is any type of care that a person needs whether at home or in a facility such as a nursing home or an assisted living community.
Q: Why are most people unprepared for the cost of an average long term care stay?
The average stay today is 3 years and the average cost is about $6,000 a month or $60,000 a year. Fewer than 20% of those that need long term care are able to cover the cost for just one spouse let alone both.
Q: What are the options?
There are basically three options:
- Those who are wealthy (w/more than $1,000,000 to $1,500,000 in liquid assets outside of real estate), usually "self insure"
- For those who are poor (assets less than $2,500 and very sick) Medicaid or medical welfare will cover the cost of long term care
- For those caught in the middle, private long term care insurance is the most viable option
Q: Will Medicare cover me?
Not for very long… For those that qualify, Medicare will on average pay up to 100 days of LTC. The average length of a covered stay in 1998 was 27 days. Besides, do you want to rely on the government? Remember also that they pay the full amount for only the first 20 days, after which you pay the first $81.50 a day.
Q: How much does LTC insurance cost?
Premiums are based on three factors:
- Current Age
- Current Health Condition
- Benefits and Riders
Long term care insurance plans have level premiums and most are guaranteed renewable. That means your rate is the same for the life of the plan.
THG represents several insurance companies that offer comprehensive LTC plans. We will design and provide you with a plan to fit your needs, family situation and budget. Our analysis will include both a benefit and cost comparison. Contact Us for more information.
Terms and Definitions:
Activities of Daily Living (ADLs): Everyday functions and activities individuals usually do without help. ADL functions include bathing, continence, dressing, eating, toileting, and transferring. Many policies use the inability to do a certain number of ADLs (such as 2 out of 6) to decide when to pay benefits.
Acute Care: Care for illness or injury that develops rapidly, has pronounced symptoms, and is finite in length. An example is medical care for a short time to cure a certain illness and/or condition.
Alzheimer's Disease: A progressive, degenerative form of dementia that causes severe intellectual deterioration.
Aphasia: Loss of the ability to use or understand language.
Assessment: A determination of physical and/or mental status by a health professional based on established medical guidelines.
Bed Reservation Benefit: A benefit that may or may not be included in a long term care insurance plan that pays for reserving your bed in a care facility should you need to be hospitalized during a covered stay.
Benefit Period: The length of time that a policy can pay the benefit amount.
Caregiver, Primary: The key person (usually a relative) overseeing and/or providing care for a person who is incapacitated.
Caregiver(s), Secondary: Relatives or others who assist part-time in giving care.
Catastrophic Illness: An illness that causes sudden temporary or permanent change or significant disruption to a person's normal lifestyle.
Chronic Care: Care for an illness continuing over a protracted period of time or recurring frequently.
Cognitive Impairment: A deficiency in a person's short or long term memory; orientation as to person, place and time; deductive or abstract reasoning; or judgement as it relates to safety awareness.
Custodial Care: Services that can be given safely and reasonably by a trained or capable non-medical person, designed mainly to assist with ADLs, such as bathing, eating, dressing, and other routine activities.
Daily Benefit: The amount of insurance benefit per day in a long term care policy a person can choose to cover long term care expenses (typically between $50 and $400 - selected by the applicant).
Dementia: Deterioration of mental faculties due to a disorder of the brain.
Elimination Period: A type of deductible; the length of time the insured must pay for long term care services before the insurance policy begins to pay benefits.
Home Health Care: At home services for occupational, physical, respiratory, speech therapy, or nursing care. Also typically included are medical, social worker, home health aide, and homemaker services.
Home Modification: Physical adaptations to a home that enable a person to stay and function in that environment.
Homemaker Services: Services designed to provide household support. They may include light housekeeping, laundry, shopping, cooking, home management and similar services.
Inflation Protection: An optional policy feature that is available for additional premiums that provides for increases in benefit levels over time to help pay for expected inflation in the costs of long term care services.
Intermediate Nursing Care: Assistance needed for stable conditions that require daily, but not 24-hour, nursing supervision. This care is initially ordered by a physician and supervised by registered nurses. It is less specialized than skilled nursing care, often involves more personal care, and is generally needed for a longer period of time.
Long Term Care (LTC): Personal care and other related services provided on an extended basis to people who need help with activities of daily living or who need supervision due to a severe cognitive impairment. It can be provided at home, in a nursing home, assisted living facility, or an adult day care center.
Means Test: Measures of income and assets to determine eligibility for some government benefit programs such as Medicaid.
Medicaid: A means-tested medical and health welfare program supported by federal, state and local funds, and administered by each state to provide health care for eligible poverty level individuals.
Medicare: The federal program providing hospital and medical insurance to people aged 65 or older and to certain younger ill or disabled persons. Benefits for nursing home and home health care services are limited.
Medicare Supplement ("Medigap") Insurance: A private insurance policy that supplements Medicare benefits by covering co-payments and deductibles for medical and hospital expenses. These policies do not provide coverage for personal or custodial care.
Monthly Benefit: The amount of insurance benefit per month in a long term care policy a person can choose to cover long term care expenses (typically between $1,500 and $12,000 - selected by the applicant).
Nursing Home: Generally a state licensed facility that provides room and board and a planned, continuous medical treatment program, including 24-hour-per-day skilled nursing care, personal care, and custodial care.
Plan of Care: A written, individualized plan prescribed by a physician or developed by other qualified health care professionals that specifies the type and frequency of long term care services required by the recipient of the care.
Pre-existing Condition: An illness or disability for which you were treated or advised within a time period before applying for a long term care policy.
Preferred Health Discount: A discount received on policy premiums available to applicants who are determined to be in very good health.
Respite Care: Long term care services provided at home or in a facility to temporarily relieve the family or friends who normally provide care for an impaired individual.
Skilled Nursing Care: Nursing and rehabilitative care that is performed by skilled medical personnel, usually available 24-hours-a-day and ordered by a physician under a treatment plan. It can be either in a facility setting or at home. (Note: Medicare and Medicaid both have their own definitions of "skilled nursing care" which do not necessarily match those in long term care insurance policies.)
Skilled Nursing Facility (SNF): Generally a state-licensed institutional setting that provides skilled care by skilled medical personnel. This care is available 24-hours-a-day and is ordered by a physician under a treatment plan.
Spousal Discount: A discount applicable if both spouses are eligible and apply for coverage.
Third-party Notification: A process that lets you name someone who the insurance company would notify if your coverage is about to lapse due to a failure to pay premium. The notice can go to a relative, friend, or professional such as a lawyer or accountant, for example.
Waiver of Premium: A provision in an insurance policy that can relieve the insured from having to pay premiums while receiving benefits.
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