Do I need Long Term Care Insurance?

Many people think that they are going to retire, go on Medicare, and that Medicare will take care of all of their healthcare costs from there on out.

FALSE.

Medicare is designed to take care of only one thing: injuries and illnesses that are CURABLE. Well, that cuts out a lot of what many people thought Medicare would cover! The biggest problem that people think Medicare will solve that it in reality doesn't solve is the cost of nursing home care, or home health care. As the country ages, more and more people are moving into nursing homes and finding out that they are very expensive places to live.

Why do people move into nursing homes? Usually it is because they cannot perform certain Activies of Daily Living(ADLs). These activities include bathing, dressing, eating, using the toilet, and transferring(think of moving from a bed to a wheelchair). If someone has trouble doing a few of these activities on their own, they will need a lot of care, and family members are not always able to give the level of care that a deteriorating person needs. On top of not being able to get through normal ADLs, the person may also have health conditions that need to be closely monitored. They may need someone to make sure they are taking their medications and eating the correct diet. Nursing homes are places where all of these needs are provided for. According to Seniorhomes.com, in North Carolina(2015) the minimum daily cost for living in a nursing home is $108, and the maximum is $630 daily.

Medicare will not pay for nursing home care, and neither will any Medicare Advantage or Supplement plan because Medicare benefits are not intended for long term treatment. They are not designed to pay for someone to help you go to the bathroom, cook your meals, or anything that is considered a normal daily activity.

Long Term Care(LTC) Insurance is designed to cover chronic care of a long duration. In North Carolina, LTC policies are required to cover a period of time no shorter than 12 consecutive months of care. The enrollee will determine how long they want the policy to provide care, whether it is 1 year or 3,4, or 5 years. Obviously, the longer the policy provides benefits, the higher the premium. These benefits don't begin until the enrollee begins using the policy. So if you buy a 3 year Long Term Care policy when you are 55, but don't go into a nursing home until you are 75, then your 3 year policy begins the date you enter the nursing home.

Long Term Care insurance will cover more than just your standard nursing home care. LTC will cover many levels of care from Skilled Nursing care when someone is being treated for a disease like cancer, to things like Assisted Living and even Adult Day Care. Adult Day Care is a program that provides care during the day while an elderly person's usual primary care giver(like a son or daughter) is at work, and can be provided in a facility or in the home.

LTC policies usually pay a maximum per day to a nursing care facility, like $80 per day or even up to $300 per day. They also usually have a waiting period that has to be met before coverage begins. Examples of these waiting periods are 20 days, 30 days, 90 days, and can even be as many as 365 days. During these waiting periods, the enrolled member would be responsible for all of the costs of the nursing facility. Again, the longer the waiting period, or the longer you pay for your own care before the policy kicks in, the lower the premium. Many policies include a benefit that waives premiums while the policy is in use, meaning you don't have to pay LTC premiums once you are receiving your benefits.

People are living longer and healthcare is advancing all the time. As healthcare advances and new long term care options are invented, Long Term Care Insurance evolves with it. Long Term Care Insurance means not relying on children or other relatives to pay for all of the costs of caring for someone in their final years of life. Nursing home care can bankrupt someone in a heartbeat, depending on the circumstance. Even at the NC minimum of $108 per day in a nursing home, that totals to $39,420 for a year. Imagine having to rely on your family to pay that bill. Most of us are going to need some level of medical care at the end of our lives, and Long Term Care Insurance is how we prepare.