Senior Citizens Should be Aware of Private Long Term Care Insurance

Long term care is a major concern of Americanprofessionals.
senior citizens and their families. Studies have shownAdult day care services are available in many
that Americans rank long term care second, behindcommunities, providing personal care, skilled care, and
saving for retirement, when prioritizing financial needs.recreational services.
Unfortunately, many Americans do not want to thinkFinancial Issues And Long Term Care
about needing long term care and, therefore, fail toThe cost of long term care varies by the level of
plan for it. Others wrongly assume that Medicare orcare needed, the setting where the care is provided,
standard health insurance policies will cover the costsand geographic location. Nursing facilities, assisted
of long term care services. As a result of this failureliving facilities, and facility care services provide
to plan, tens of thousands of Americans aredifferent levels of care to different resident
impoverished each year by the costs of long termpopulations; therefore, costs are not comparable.
care.On average, round-the-clock long term care services
The best time to plan for long term care is before itin a nursing facility cost $40,000 per year, or $112 per
is needed. Start thinking about long term care whenday.
you plan for retirement. If you are already retired, itAssisted living costs vary dramatically-anywhere from
is not too late to begin planning for potential long$900 to $3000 per month depending on room size,
term care needs.amenities provided, and services required.
Private long term care insurance is an excellent wayFacility care, if needed daily, also can be quite
to finance long term care. This brochure will guideexpensive. In 1996, an average facility care visit from
you through the important process of selecting thea registered nurse (RN) cost $99. RN visits for facility
right long term care insurance policy. This bookletcare typically do not exceed 2-4 hours per day, so
provides information on long term care services,care is not round-the-clock.
what to look for in a long term care insurance policy,Eight hours of adult day care can cost an average of
and a glossary of terms.$45 per day.
Finding a good policy will take some effort, but theNursing Facility Care: About one third of the costs of
effort will be worthwhile. Here are some steps tonursing facility care are paid directly by individuals and
take when considering the decision to purchase atheir families. Two government programs may pay
long term care insurance policy:for some of your care.
1. Talk to your financial planner or insurance agentMedicare, a health insurance program for people age
about whether long term care insurance makes65 or older, only covers skilled facility care and up to
sense for you.100 days of skilled care in a nursing facility if you are
2. Ask your financial advisor to recommend aadmitted after a three-day hospitalization (not
company and a policy.required if you are an HMO member) and your
3. Check with insurance rating services to make surephysician prescribes skilled care in your treatment
the insurance company you are considering isplan. Many people think that Medicare is the primary
financially secure.payor of nursing facility stays, but Medicare accounts
4. Call your state insurance department and askfor only 9 percent of nursing facility expenditures.
about the company and its record in your state.Medicaid, a program for the poor, pays for
5. Make sure your insurance agent is licensed to sellapproximately 52 percent of the nation's nursing
long term care insurance in your state.facility care, but only for people who have spent
6. Review all the details and options of the policy. Doalmost all their assets and become impoverished. Due
not rely just on the marketing materials or outline ofto lack of planning for long term care, Medicaid is the
coverage.source of payment for nearly 70 percent of people
7. Make sure you understand all the provisions beforein nursing facilities!
you purchase any policy.Unless you have long term care insurance, qualify
8. Ask your insurance agent questions. Seek guidanceunder limited conditions for Medicare coverage, or
from the state insurance commission office, the Areabecome poor, you will pay out of your savings for
Agency on Aging, or local senior centers. Discussnursing facility services.
policies with friends, family, and others whoseAssisted Living: About 90 percent of the nation's
opinions you respect. Take time when choosing aassisted living services are paid for with private funds.
policy, and don't allow yourself to be pressured intoThe Supplemental Security Income, Older Americans
making quick decisions. And remember: Never payAct, and Social Services Block Grant programs pay
cash.for some assisted living services, while about
The decision to purchase long term care insurance isone-fifth of the states allow the federal Medicaid
not a simple one, but thorough investigation andprogram to pay for some service components.
thoughtful planning now can offer you and yourFacility Care: Private funds pay for about 46 percent
family financial protection for the future, and, mostof facility care costs; Medicare covers 32 percent;
importantly, peace of mind.Medicaid, 22 percent.
Defining Long Term CareAdult Day Care: There are some out-of-pocket
Long term care includes a range of nursing, social,expenses for adult day care; however, the majority
and rehabilitative services for people who needof funding comes from public sources either the
ongoing assistance. Most people in long term carestate exclusively, or, in some states, Medicare and
facilities are older, but many young people need longMedicaid. Private donations from corporations and
term care during an extended illness or after ancharitable groups such as the United Way also
accident.supplement the costs of adult day care.
Assistance with routine personal needs such asWhen To Buy Long Term Care Insurance
bathing, dressing, eating, toileting, and taking medicineBecause long term care insurance premiums are
is the most common long term care service. Longbased on age at the time of purchase, the younger
term care facilities also provide skilled nursing andyou are when you purchase a policy, the less
rehabilitative care, which is ordered by a physician andexpensive the annual premium. These premiums for
supervised by skilled medical personnel such as amost policies stay level each year as you age. If you
nurse or licensed therapist.buy at age 55 a policy that cost $800 per year, you
Long Term Care Is Offered In A Variety Of Settingswill continue to pay the same premium. However, if
Nursing facilities are the primary settings for peopleyou wait until you are 65, the same policy will cost
who require medical care daily or intermittently. Youyou $1,700 per year.
must have a physician specify needed services in aWhat To Look For In A Policy
written treatment plan for admission to a nursingThe best policy for you depends on several factors,
facility. Many nursing facility stays are short periodsincluding your family arrangement, your financial
of recuperation from an acute medical episode suchsituation, your preferences regarding long term care
as a hip fracture or surgery.choices, and the level of risk you are willing to accept.
Assisted living facilities or residential care facilitiesThere is no one best company or one best policy for
provide general supervision, housekeeping services,everyone. You should select a policy that meets your
medical monitoring, and planned social, recreational,needs.
and spiritual activities for people who are stillBefore you buy a policy, make sure you know the
independent and ambulatory. Assisted living facilitiesproduct you are buying and from whom you are
do not provide medical care.buying it. Be sure your agent is licensed to sell
Facility care services include skilled nursing care,insurance in your state and has received specific
speech, physical, or occupational therapy, facilitytraining on long term care insurance. Consult friends,
health aides, or help from facilitymakers. Sometimes,consumer guides, and information from your state's
family members, or caregivers, provide most of theinsurance counseling program or local agency on aging.
care with the help of facility aides and skilled