04 August 2016
Long-Term Care Insurance: Things to Consider

We’re all getting older, and that big bubble of Baby Boomers born after World War II is retiring and wondering how to manage long-term healthcare costs. People over 65 years old represented 14.5% of the U.S. population in 2014, and are expected to comprise 21.7% of the population by 2040.1

As medical treatments improve and life spans increase, long-term health care for seniors becomes an extremely important issue. The U.S. Department of Health and Human Services estimates that almost 70% of people turning age 65 will need long-term care at some point in their lives.2

Boom Times

Institutional healthcare gets expensive, especially as residents of assisted living facilities and nursing homes are living longer. Few of us have saved enough money to afford the monthly costs of these facilities over an extended period of time.

More and more seniors are depleting a lifetime of savings to become eligible for Title XIX protection – Medicaid. After qualifying for Medicaid, each patient pays what’s available – assets like Social Security or a pension check – to the nursing facility and the federal government makes up the difference.

Insurance Fills the Gap

Long-term care insurance can help pay for both medical and non-medical care for people with a chronic illness or disability. Non-medical long-term care services may assist people with daily needs, such as dressing, bathing, and using the bathroom. Having insurance that pays for in-home care can help older people remain in their own homes as long as possible, and insurance can also help pay for care in a skilled nursing care facility.

Long-term health care coverage can provide a subsidy with a patient co-pay, or the coverage can insure against all expenses. Of course, the more coverage you have, the more expensive that coverage will be.

Not all long-term policies deliver benefits from Day One. Long care policies usually have a defined elimination period – the number of days a patient must remain in a long-term care facility before insurance assumes some or all expenses.

Typically, elimination periods range from 0-180 days. The shorter the elimination period, the more expensive the policy. There are other requirements in many long-term care policies like the inability to perform routine functions or cognitive impairment.

How much does a policy pay? Of course, this depends on the type of policy in place at the time of an accident or illness. Some policies cover all expenses; others cover a detailed list of expenses.

Plan Ahead

The time to plan for long-term healthcare needs is long before you need them. You’ll be glad you prepared ahead of time when you actually start using long-term health coverages.

Don’t wait. The older you are, the more expensive long-term health care becomes. Talk to your insurance broker or insurance company about long-term health care insurance, and do it today. The longer you wait, the more it’s going to cost, and if you’re really getting on in years, you may not even be able to get disability coverage because it’s too risky for the insurance company.

Talk to your employer about group rates on long-term healthcare. You may be able to save a lot if your employer offers disability coverage at a subsidized rate. As Boomers retire, employers may make good on promises from years ago. Long-term healthcare was once a common benefit, and your employer might still be obliged to pay some of your expenses. Talk to the healthcare specialist in the human resources department to see if you’re eligible and what you can expect when you retire.

Do your homework now and find out if long-term care insurance is a solution that works for you. Then plan ahead and collect information about facilities in your area and what they cost. Having plans in place will give you a measure of security about your future.

Click here for more information on long-term care, or visit the Nevada Division of Insurance website.

  1. http://www.aoa.acl.gov/Aging_Statistics/index.aspx
  2. http://longtermcare.gov/the-basics/


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.


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