What Is Long Term Care Insurance?

What Is Long Term Care Insurance? Long-term care insurance can protect you from the cost of an unexpected long-term care event. Introduced in the 1980s as nursing home insurance, long-term care insurance will pay or reimburse you for some or all of the care you require when you are unable to care for yourself.

Purchasing long-term care before your time of need can alleviate the burden on family members and your personal assets. Long-term care insurance also preserves your independence by allowing you to choose from many care options instead of being limited to what you can afford out of pocket. Keep in mind, in 2007 the average median annual rate of nursing home care in the United States was $70,445 per year, the cost of an assisted living facility was $32,568 per year, and part-time in-home care exceeded $16,000 per year.

Many people think that their health insurance will pay for long-term care expenses. Unfortunately, long-term care is generally not considered medical care and typically health insurance plans will not pay for long-term care expenses.

You should not rely on Medicare to pay for long-term care. Medicare does not cover most nursing home care and will only pay the cost of some skilled care in an approved nursing home or in your home in specific situations. When all conditions are met, Medicare will only pay for 100 days of care per benefit period.

Medicaid will pay for nursing home care only for individuals who are low-income and who have few assets. It will only pay for some home- and community-based services. To get help from Medicaid, you must meet federal and state guidelines for income and assets. In order to qualify, many people start paying for care out of their own funds and reduce their income and assets until they are eligible for benefits. Medicaid may then pay part or all of their nursing home costs, but their personal resources have been depleted, leaving little for other expenses.