Most people have a hard time thinking about the possibility of requiring a caregiver as they age. In an ideal world, people could live independently at home with their families without any outside assistance. But the truth is that nearly seven in ten people will need some kind of care or support as they age.
That care can be expensive, and people who don’t have the financial means to cover the cost often end up going without the care they need. That’s why long-term care insurance is such an important consideration. Long-term care insurance helps you cover the cost of essential care in your golden years, including both residential facilities and home health care. Here’s how you can make sure you or your family members are covered.
What Is Long-Term Care Insurance?
Long-term care (LTC) insurance is designed to provide care support services for people who need assistance with the activities of daily living or who need skilled nursing care. In order to receive a benefit, you must require assistance with basic self-care tasks such as bathing, dressing, ambulating, grooming, feeding, toileting, or transferring. LTC insurance will cover all costs related to care in nursing homes, assisted living facilities, and adult day care. It will also help with the cost of home health care, including Alzheimer’s and dementia care.
There are two basic types of LTC insurance policies available:
- Stand-Alone Policies - Stand-alone policies cover long-term care only. They are generally less expensive, but they provide no benefit if you don’t end up using them. In other words, you could pay into the policy for ten or fifteen years and never receive any return. Premiums in these policies are not fixed and may increase over time.
- Asset-Based Policies - These policies are a hybrid of LTC insurance and life insurance. They typically have higher premiums, but the premiums are fixed. This type of policy will also pay a death benefit to your heirs, just like life insurance.
These two basic types of policies are available through a number of different sources, including:
- Individual plans - These plans are typically purchased through an insurance broker.
- Employer-sponsored plans - Benefits may be available through your employer’s group policy at a discounted rate. In most cases, you can keep your policy if you leave the employer as long as you continue to pay the premium.
- Joint policies - Joint policies provide coverage for more than one person, usually two married adults or two related adults.
- State partnership programs - Most states have a partnership program that allows you to keep some of your assets while still qualifying for Medicaid benefits. Your insurance agent will be able to tell you whether your plan qualifies.
What Long-Term Care Insurance Is Not
Long-term care insurance is not health insurance. This can be confusing in terms of what you can expect an LTC insurance policy to cover. The key to remember is that LTC insurance is designed to cover your ongoing care expenses, not your medical expenses. That means it will not cover:
- Hospital stays
- Routine tests
- Medical procedures
- Urgent care needs
These types of needs are covered by healthcare insurance. Long-term care insurance picks up where your healthcare policy leaves off, providing reimbursement for costs of nursing home care, assisted living care, or home care.
How Long-Term Care Insurance Helps You Pay for Home Care
Policies vary in the specifics of what they will cover, so be sure to check the details of your policy as you determine what kind of care you would like to pursue for yourself or your elderly loved one. If home care is the right choice for you, most policies will cover at least part of the cost and some will cover the full cost of home care services.
Some insurance companies require that you use a certified home care provider to qualify for benefits. Others include an “elimination period” during which you are required to pay out of pocket for services until the policy kicks in. Again, make sure you check the specifics of your policy so you know exactly what to expect.
To file a claim, you will need to qualify for benefits under the specific guidelines of your policy. Benefit triggers may also be established by your state in some cases. These triggers usually include needing assistance with activities of daily living, experiencing cognitive impairment, or a doctor’s statement of medical need.
Is Long-Term Care Insurance Right for You?
Because most people will eventually need some kind of care assistance as they age, it is wise to consider long-term care insurance well before you think you need it. For most people, that means looking into a policy in your 50s or 60s since premiums increase as you get older. In addition, if you wait until you have a pre-existing condition or a chronic illness, many insurance companies will no longer provide coverage.
Long-term care insurance is one possible way to help you cover the costs of home health care so that you or your loved one can continue to enjoy independence at home. If you have questions about whether you qualify or how you should go about exploring your options, Cherished Companions is ready to help.
For further questions, to request resources, or to inquire about getting or becoming a caregiver, contact Cherished Companions today on our website or call (440) 484-5390!