Long-Term Care

Article submitted by Ronald C. Camut, Jr., Financial Specialist with LSA Securities, a division of Allstate Financial Services.
For more information, he can be reached at 504-835-0446.

People are living longer than ever before, thus increasing the need for long-term care (LTC) insurance. Two out of every five Americans will need nursing home care at some point in their lives (source: AHCA American Health Care Association). LTC insurance is designed to cover the costs associated with nursing care and home health care services. Most important, long-term care insurance provides security and reassurance for individuals and their families should the need for long-term care arise.

The types of care range from help with everyday activities like bathing and dressing to continuous care by skilled medical personnel in a nursing home. The following is a list of what services are considered under long-term care: assisted living facility, home health care, adult day care, respite care, hospice care, personal services, homemaker services, adult congregate living facilities (ACLF), and continuing care retirement communities (CCRC).

The reality is one in four people who live to age 65 will spend one year or more in a nursing home, and one in three will spend three months or more in nursing care or assisted living situations (source: United Seniors Health Council (USHC).

It is extremely important that families understand that Medicare and Medicaid are government-funded programs for specific individuals or low-income families, and there are strict eligibility requirements to qualify for coverage. Currently, Medicare pays about 12% of all nursing care facility costs nationwide. Medicaid pays approximately half of all nursing home costs for eligible residents (after they spend down their assets to qualify) or for those who meet federal poverty guidelines (Guide to Long-Term Care Insurance, Health Insurance Association of America (HIAA), 1999).

The cost of long-term care can take a toll on individuals and their families, not only financially, but emotionally as well. Even though some are prepared for retirement, the cost of nursing care and assisted living can quickly deplete any assets. Having a long-term care insurance plan can provide security, peace of mind, and protection.