Friday, July 28, 2006

How to Define Long Term Care

Long term care can mean many different things but any chronic or disabling condition that requires nursing care or constant supervision can bring on the need for long term care services. Long term care means not only care in a nursing home, it can also mean nursing care in your own home and help with the activities of daily living, such as dressing, eating, bathing and taking medicine.

There are many different services that would fall under the definition of long term care. These services include institutional care, i.e., nursing facilities, or non-institutional care such as home health care, personal care, adult day care, long term home health care, respite care and hospice care.

There are other long term care services that provide people with an option other than nursing home care. These services are defined below:

Home health care consists of services received in your home, and can include skilled nursing care, speech, physical or occupational therapy or home health aide services.

Home care (personal care) consists of assistance with personal hygiene, dressing or feeding, nutritional or support functions and health-related tasks.

Adult day care is for persons living at home, and provides supervision for elderly persons during the day when family members are not at home. It is a method of delivering a variety and range of services including social and recreational, and in some cases, health services, in a group setting.

Assisted living facilities provide ongoing care and related services to support those needs resulting from a person's inability to perform activities of daily living or a cognitive impairment.

An alternate level of care in a hospital is care received as a hospital inpatient when there is no medical necessity for being in the hospital and is for those persons waiting to be placed in a nursing home or while arrangements are being made for home care.

Respite care includes services that can provide family members a rest or vacation from their caregiving responsibilities. It can be provided in a variety of settings including an individual's home or a nursing home.

Hospice care is a program of care and treatment, either in a hospice care facility or in the home, for persons who are terminally ill and have a life expectancy of six months or less.

Tuesday, July 25, 2006

LTC insurance: A smart financial decision?

Ok, let's say that you have some disposable income and you are trying to decide between purchasing long term care insurance and investing your extra money into other investments such as 401k's or mutual funds.

Some would say, "Hey, I'm still fairly young, so why not invest my money into a mutual fund and use the money made off of it to purchase long term care insurance at a later date"
For example, a person could invest their money at age 40 and cash the investment in at age 60 and the income made off of it could pay for their long term care insurance.

On the surface this sounds like a very smart plan that will make the most out of your disposable income. In general though this is not a financially sound move and there are a few reasons as to why that is.

First of all, if you take out a long term care insurance plan at age 40 vs. age 60 the amount of the premiums that you pay will be vastly different. The older a person gets the higher the monthly premium is for the long term care insurance policy. This is done because the insurance company knows that the older a person gets the more likely that person is to actually use the insurance.

Second, a person who waits until age 60 to get long term care insurance could experience a variety of medical problems that might make him or her fail underwriting screens (physical exams). Even if you are able to pass the underwriting screens, you will still likely face a higher insurance premiums because of those health problems that have accumulated.

Third, there is always the possibility that a person would need to use the long term care insurance benefits long before reaching age 60. In fact, many people require services that LTC insurance covers before they reach age 65.

As you can see, the longer that a person waits to take out a long term care insurance policy, the greater the likelihood that he or she will pay much more for the premiums of that policy. The residual income made by investing in mutual funds or 401k's will generally not make up for the increased price that you will pay for the insurance plan.

Thursday, July 20, 2006

Long Term Care Insurance Shopping Tips

By Scott Lunt

It's hard to face the reality of needing long term care. But more and more people are realizing that if they do need it, they may lose their entire retirement assets just to pay for it. It's now considered part of a smart financial plan to have long term care insurance if you don't have enough assets to cover the costs and still maintain your standard of living. The insurance can seem expensive so keep these points in mind when shopping for quotes.

Your age, health and desired benefits are the biggest factors that affect how much you pay for long term care insurance.

The older you are, the greater the chance that you may need long term care. Thus insurers will charge more to insure a 65-year-old than a 55-year-old. A recent study* released by the American Association for Long-term Care Insurance showed that the difference in yearly premium between a 55-year-old in good health and a 65-year-old in good health -- for the same benefits -- averaged almost $700 more.

The benefit affects your premium. You can choose a per diem amount for most policies based on what you think you may need. For example a policy may pay $30, $100, or $300 per day. The higher the benefit, the more your premium will be. Also, you can choose different lengths of waiting period before your benefits kick in. The longer the waiting period, the lower your premium should be.

Rates can vary between companies, so the most important consideration when shopping for long term care insurance is to get comparison quotes. When you're comparing different company quotes take a look at the following:

1. How much does the policy cost per month and per year?

2. Is there an inflation adjustment feature? How much does that feature cost?

3. What services are covered? (Nursing home, at-home care, assisted living care, etc.)

4. What is the waiting period before benefits start?

5. How much does the policy pay per day for the services? How long does the benefit last per service? Is there a lifetime benefit maximum?

6. Are pre-existing conditions covered? What conditions are covered?

7. Is the policy guaranteed renewable?

8. Does the company have a financially strong rating from an independent rating agency?

Once you select a policy, take the time to read through it carefully. If you don't understand any part of the policy, ask questions.

*2006 National Long-term Care Insurance Price Index

Scott Lunt is a freelance writer with over 15 years experience writing insurance-related articles. You can compare long term care insurance quotes and find more tips on saving on car, home, life, health and long-term care insurance at
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Sunday, July 16, 2006

I'm young and healthy, I don't need long term care insurance

The truth is that even though you may be young and/or healthy today, things can change in the blink of an eye and will make you wish that you had taken out long term care insurance.

Surprisingly, about 40% of people needing long term care are adults aged 18-64, NOT people of retirement age. These people could have experienced any number of health problems that led them to needing long term care. Some examples could be accidents, strokes, multiple sclerosis. etc.

So regardless of your age and current health status you should really be considering long term care health insurance. Yes, long term care insurance isn't always cheap, but if you plan ahead now you may save money by paying lower rates. Long term care insurance typically becomes more expensive as you get older and as health problems develop or increase.

Saturday, July 15, 2006

Long Term Care Insurance vs. Medicare vs. Medicaid

Think Medicare and Medicaid will take care of all of your long term care insurance needs? Think again.

Medicare will NOT cover services considered to be long term care services such as custodial care. If you have the idea that Medicare will take care of all of your long term care insurance needs then you need to read the following:

Medicare is a Federal health insurance program generally covering people who are age 65 or older and some disabled persons. Medicare will cover the first 100 days of care in a nursing home if:

1) you are receiving skilled care, and 2) you have a qualifying hospital stay of at least 3 days and enter the nursing home within 30 days of that hospital discharge. There are also some deductibles and copays (meaning you have to pay part of the cost). Medicare also covers limited home visits for skilled care.

It's very important to realize a few things about long term care versus Medicare's coverage:

most long term care is not skilled care,

most long term care does not take place in a nursing home,

most nursing home stays do not immediately follow a hospital stay,

most people who require care in their home usually need more or different types of care than Medicare covers, and most people won't start Medicare coverage until age 65.

So don't count on Medicare to cover your long term care needs.

What about Medicaid?

Medicaid is set up by individual states, and subsidized by the feds, to act as a safety net for the poor and impoverished. Medicaid covers long term care services and might cover you if you meet your state's poverty criteria and receive care that meets your state's guidelines. Usually this means expending all but $2,000 of your assets and savings (except for perhaps your house and your car). It also means receiving care from a limited number of state-approved caregivers (mostly institutions like nursing homes) that are willing to accept Medicaid's payments.

In other words, if you have any money saved up (like retirement plans, 401k's, etc) you have to cash it all in and spend it on your long term care insurance needs before you can apply for Medicaid. It also means that you do not have choices in who provides the long term care to you.

With Medicaid, you are forced to receive services from a Medicaid provider, often these providers, although well meaning, are the bottom of the barrel providers. Medicaid does not reimburse very well at all for services provided by healthcare organizations. This means that those who do accept Medicaid as payment are often understaffed because they cannot afford to pay their staff what their competitors do.

If you take out long term care insurance you do not have to deplete your assets in order to receive needed care, and you will have choices as to who provides your care. If you do not have long term care insurance then you are taking a big risk.

Thursday, July 13, 2006

What is Long Term Care Insurance?

By Elizabeth Newberry

Long term care insurance can be a complex and sensitive subject – one that most people hope they will never have to take out. As the name suggests, it is the name given to the insurance that provides coverage for the care given to a person when they need permanent and continuous care.

Long term care has been described as the biggest challenge that an elderly person could have - and an estimated 70% of people aged 65 or over will need long term home care at some point in their lives.

This care is usually provided by a family member or close relative – often a spouse, a daughter or daughter in law. Around 70% of long term care is provided in the home and can include medical care and help with everyday activities. Long term care insurance offers coverage and benefits for services not covered by regular insurance or by Medicare.

Not surprisingly, long term care doesn’t come cheap and paying for it can be a challenge – studies show that the average cost for the insurance increases by around 12% every year – the average cost of a year spent in a nursing home is around $41,000.

Long term care insurance makes sense if you are young and have the necessary time to prepay for adequate coverage – although most of us don’t think about it when we are young. There are several different methods of paying for the insurance, or for older people who don’t have the funds; there may be other options, such as using money from assets. Medicare may help cover the costs for those who have no other options.

Apart from being an unavoidable fact of life for most older people, long term care should not necessarily be seen as something negative. For many people, it offers a way to maintain some of their independence as well as peace of mind, and ensures their later years won’t put a strain on family relationships.

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Wednesday, July 05, 2006

Statistics on long term care

Why should you get long term care insurance?
Will you really need it?
What if you never go to a long term care facility?
Wouldn't it be wasted money?

These are some of the questions asked by those
who may be considering long term care insurance.

Here are some surprising statistics if you think
that you will never use or need long term care insurance.

According to the Society of Actuaries in 1995

The odds of having a house fire with damage of at
least $3,400 is......................1 in 200
The odds of having an automobile accident with
damages of at least $3,000....1 in 14
The odds at age 65 of spending at least 2.5 years in
a long term care facility....1 in 3

Now the question is, do you have house insurance?
Do you have auto insurance?
Of course you do, it would be silly not to. You have
to protect your largest investments in case something
were to happen to them.

But these same thoughts are rarely applied when
people consider the likelihood of needing
long term care insurance at some point in their
life. Consider the fact that the cost of long term care
for one year can cost $45,000-50,000 OR MORE
and you can see why people of all ages should be
considering long term care insurance coverage.

Odds are very high that you will spend some time
in a long term care facility, the statistics above do
not account for spending less time in a long term
care environment, which would certainly be higher.

The typical scenario is that an elderly person falls ill
with cancer, diabetes, pneumonia, stroke, etc. That
person is then transferred from the hospital to a long
term care center as soon as the patient is stable. The
hospitals have incentives from insurance companies
to get a patient out of the hospital as soon as possible
so that the hospital does not have a high ALOS
(average length of stay).

This means that recoveries that are expected to only
require 2 weeks could result in a stay at a long term
care facility, and thus need long term care insurance.

Monday, July 03, 2006

Why Long Term Care Insurance?

Why did I create a blog about long term care insurance?

The answer is fairly simple, I graduated recently with a masters in health services administration and during that time period I learned a great deal about the impact that long term care can have on a persons life.

I learned that long term care facilities are extremely expensive, they can range up to $10,000 a month or more depending on the type of facility and the level of care received. I also learned that most elderly people who do not have long term care insurance are required to deplete their assets before being able to qualify for Medicaid.

Medicaid is the coverage that a person can receive in addition to Medicare if they meet the financial criteria. People who get both Medicaid and Medicare are considered to be "dual eligible".

The unfortunate truth is that long term care facilities are not all created equal. As my own parents age I have been thinking more and more about the type of long term facility that I would like to see them go to if the need ever arises.

Where I would "like" to see them go is to the more expensive facilities because the more expensive ones typically provide a higher quality of care. The main reason I say this is because the more expensive long term care centers are able to pay nursing staff what they deserve and are able to create and maintain a well qualified staff of caregivers.

Unfortunately, neither of my parents are listening to my suggestions that they take out long term care insurance.

Without long term care insurance, a person is quite limited in the choices of long term care facilities, unless he or she has a bundle of money in the bank. Long term care is expensive and long term care insurance can help you to get the care that you or your family members deserve when the times comes.