What Senior Citizens Need To Know About Private Long Term Care Insurance

Long term care is a major concern of American senior citizensand their families. Studies have shown that Americans rank longterm care second, behind saving for retirement, whenprioritizing financial needs. Unfortunately, many Americans donot want to think about needing long term care and, therefore,fail to plan for it. Others wrongly assume that Medicare orstandard health insurance policies will cover the costs of longterm care services. As a result of this failure to plan, tens ofthousands of Americans are impoverished each year by the costsof long term care.The best time to plan for long term care is before it is needed.Start thinking about long term care when you plan forretirement. If you are already retired, it is not too late tobegin planning for potential long term care needs.Private long term care insurance is an excellent way to financelong term care. This brochure will guide you through theimportant process of selecting the right long term careinsurance policy. This booklet provides information on long termcare services, what to look for in a long term care insurancepolicy, and a glossary of terms.Finding a good policy will take some effort, but the effort willbe worthwhile. Here are some steps to take when considering thedecision to purchase a long term care insurance policy:1. Talk to your financial planner or insurance agent aboutwhether long term care insurance makes sense for you. 2. Askyour financial advisor to recommend a company and a policy.3. Check with insurance rating services to make sure theinsurance company you are considering is financially secure. 4.Call your state insurance department and ask about the companyand its record in your state. 5. Make sure your insurance agentis licensed to sell long term care insurance in your state. 6.Review all the details and options of the policy. Do not relyjust on the marketing materials or outline of coverage. 7. Makesure you understand all the provisions before you purchase anypolicy. 8. Ask your insurance agent questions. Seek guidancefrom the state insurance commission office, the Area Agency onAging, or local senior centers. Discuss policies with friends,family, and others whose opinions you respect. Take time whenchoosing a policy, and don't allow yourself to be pressured intomaking quick decisions. And remember: Never pay cash.The decision to purchase long term care insurance is not asimple one, but thorough investigation and thoughtful planningnow can offer you and your family financial protection for thefuture, and, most importantly, peace of mind.Defining Long Term CareLong term care includes a range of nursing, social, andrehabilitative services for people who need ongoing assistance.Most people in long term care facilities are older, but manyyoung people need long term care during an extended illness orafter an accident.Assistance with routine personal needs such as bathing,dressing, eating, toileting, and taking medicine is the mostcommon long term care service. Long term care facilities alsoprovide skilled nursing and rehabilitative care, which isordered by a physician and supervised by skilled medicalpersonnel such as a nurse or licensed therapist. Long Term Care Is Offered In A Variety Of SettingsNursing facilities are the primary settings for people whorequire medical care daily or intermittently. You must have aphysician specify needed services in a written treatment planfor admission to a nursing facility. Many nursing facility staysare short periods of recuperation from an acute medical episodesuch as a hip fracture or surgery.Assisted living facilities or residential care facilitiesprovide general supervision, housekeeping services, medicalmonitoring, and planned social, recreational, and spiritualactivities for people who are still independent and ambulatory.Assisted living facilities do not provide medical care.Facility care services include skilled nursing care, speech,physical, or occupational therapy, facility health aides, orhelp from facilitymakers. Sometimes, family members, orcaregivers, provide most of the care with the help of facilityaides and skilled professionals.Adult day care services are available in many communities,providing personal care, skilled care, and recreational services. Financial Issues And Long Term CareThe cost of long term care varies by the level of care needed,the setting where the care is provided, and geographic location.Nursing facilities, assisted living facilities, and facilitycare services provide different levels of care to differentresident populations; therefore, costs are not comparable.On average, round-the-clock long term care services in a nursingfacility cost $40,000 per year, or $112 per day.Assisted living costs vary dramatically--anywhere from $900 to$3000 per month depending on room size, amenities provided, andservices required.Facility care, if needed daily, also can be quite expensive. In1996, an average facility care visit from a registered nurse(RN) cost $99. RN visits for facility care typically do notexceed 2-4 hours per day, so care is not round-the-clock.Eight hours of adult day care can cost an average of $45 per day.Nursing Facility Care: About one third of the costs of nursingfacility care are paid directly by individuals and theirfamilies. Two government programs may pay for some of your care.Medicare, a health insurance program for people age 65 or older,only covers skilled facility care and up to 100 days of skilledcare in a nursing facility if you are admitted after a three-dayhospitalization (not required if you are an HMO member) and yourphysician prescribes skilled care in your treatment plan. Manypeople think that Medicare is the primary payor of nursingfacility stays, but Medicare accounts for only 9 percent ofnursing facility expenditures.Medicaid, a program for the poor, pays for approximately 52percent of the nation's nursing facility care, but only forpeople who have spent almost all their assets and becomeimpoverished. Due to lack of planning for long term care,Medicaid is the source of payment for nearly 70 percent ofpeople in nursing facilities!Unless you have long term care insurance, qualify under limitedconditions for Medicare coverage, or become poor, you will payout of your savings for nursing facility services.Assisted Living: About 90 percent of the nation's assistedliving services are paid for with private funds. TheSupplemental Security Income, Older Americans Act, and SocialServices Block Grant programs pay for some assisted livingservices, while about one-fifth of the states allow the federalMedicaid program to pay for some service components.Facility Care: Private funds pay for about 46 percent offacility care costs; Medicare covers 32 percent; Medicaid, 22percent.Adult Day Care: There are some out-of-pocket expenses for adultday care; however, the majority of funding comes from publicsources either the state exclusively, or, in some states,Medicare and Medicaid. Private donations from corporations andcharitable groups such as the United Way also supplement thecosts of adult day care. When To Buy Long Term Care InsuranceBecause long term care insurance premiums are based on age atthe time of purchase, the younger you are when you purchase apolicy, the less expensive the annual premium. These premiumsfor most policies stay level each year as you age. If you buy atage 55 a policy that cost $800 per year, you will continue topay the same premium. However, if you wait until you are 65, thesame policy will cost you $1,700 per year. What To Look For In A PolicyThe best policy for you depends on several factors, includingyour family arrangement, your financial situation, yourpreferences regarding long term care choices, and the level ofrisk you are willing to accept. There is no one best company orone best policy for everyone. You should select a policy thatmeets your needs.Before you buy a policy, make sure you know the product you arebuying and from whom you are buying it. Be sure your agent islicensed to sell insurance in your state and has receivedspecific training on long term care insurance. Consult friends,consumer guides, and information from your state's insurancecounseling program or local agency on aging.For the complete article click on What Senior Citizens Need To Know About Private Long Term CareInsurance.