|
MAIN
 Your
Money Insurance
Covering
the Costs of Long Term Care —
LTC Insurance Basics
With all of
the fantastic scientific breakthroughs in medicine, people are
surviving accidents and diseases that might have been deadly just
ten years ago. With better long term care (LTC), people are living
longer, healthier lives and extending the life span by years every
generation.
The ability
of doctors to prolong life is welcome, but does create one major
problem. The costs of getting sick are growing more expensive
every year. To pay for the wonder drugs and new medical technology
that can sustain life, the hospitals, hospices, convalescent facilities
and nursing homes that provide long term care have to charge very
high fees. The elderly and others who require long term medical
care are faced with bills that they cannot pay and that their
insurance may not cover. Many families are faced with a tremendous
burden just at the time that kids are starting college or when
a couple were hoping to retire without worrying about finances.
The costs
of LTC depend on where you live and what choices you make regarding
the care. Staying at home or with family will be less costly than
moving to a nursing home or an assisted living facility. A Kiplinger's
report from 1999, reported by EF
Moody, found that Alaskans could expect to pay an average
of US$413 per day for LTC while in Oklahoma and Louisiana the
cost were closer to US$90 a day. A similar study in 2000 by Met
Life found, "Manhattan is the costliest at $295 per day
for a private room while the Hibbing, Minnesota area is the lowest
at $90, with prices dependent on supply and demand and the cost
of living." The average daily cost for nursing home care
in the United States was US$153. That comes to US$4743 a month
on average...and that was in 2000.
According
to statistics from the US Census Bureau released in July 2004
there are 48,883,408 Americans over the age of 60 and 4,859,631
older than 85. Current estimates are that close to 55 per cent
of Americans who are 85 or older, more than 2.5 million, need
LTC. By the year 2020, that figure is expected to rise to 12 million.
Traditional
health insurance policies and disability insurance usually do
not cover the cost of long term care. Most insurance policies
have a limit both on the amount of time they will cover and on
the amount of money that can be reimbursed. This gap has created
a financial hardship and emotional turmoil in many families. To
fix this problem and cover the costs of LTC, insurance companies
have introduced LTC insurance.
Do you
need LTC Insurance?
If you can comfortably afford to pay for 30 months of long term
care, the average in the US, you probably don't need to worry
about insuring yourself against the cost of long term illness,
accident or aging. US$1,500,000 is the current average cost of
two and a half years of LTC. That's a big expense, especially
when you compare it to the cost of LTC insurance.
Long term
care insurance policies are designed to help cover the cost of
licensed nursing homes, adult day care, convalescent hospitals
and home care. MS, Alzheimer's and Parkinson's are common diseases
that require long term health care. Hospice care, elder care and
rehabilitation after a major accident, heart attack or stroke
are just some of the situations where this insurance can be used.
There are many companies that write LTC insurance policies and
the deductibles, coverage, limits and exclusions vary. Shopping
around and doing your homework before deciding on any policy is
always a good idea.
It is best
to be prepared to handle the financial drain of long term health
care before it becomes a crisis. Talk to your financial advisor
or your insurance broker to find out more details and to decide
if LTC insurance is something you or your family should consider.
More
about long term health insurance around the Web:
Long
Term Care Insurance Organization
LTC
Insurance Education
|
