Long Term Care Answer Center

Long-Term Care FAQs

What is Long-Term Care Insurance and who needs it?

Long-Term Care Insurance is a policy that helps cover the costs of long-term care services, such as assistance with daily living activities (bathing, dressing, eating, mobility, and toileting) skilled nursing care, or home health care. It is designed to protect individuals from the high cost of associated with care at home, in a nursing home, or in a long-term care facility.

Anyone who is concerned about the potential expenses of long-term care should consider Long-Term Care Insurance, particularly those who have assets they would like to protect from the high price of the extended need for custodial care. It is especially important for individuals over the age of 50 who may be at a higher risk of age related health conditions.

Does medicare cover long-Term care services?

Medicare does not cover long-term care services. It will only cover short-term stays in skilled nursing facilities when certain medical conditions are met, such as a hospital stay of at least three days before admission to a nursing facility. Medicare may cover specific home health services for a limited time but only when recovering from injury or a covered illness. Ongoing long-term care that includes help with daily living activities, also known as custodial care, is not a provided Medicare coverage.

what happens if I need long-term care but don't have insurance?

If the need for long-term care arises and someone does not have insurance, they will likely need to pay out-of-pocket for care. This could lead to significant financial strain and potentially deplete savings or other assets. Without insurance, the need to rely on Medicaid may occur but only after financial resources have been significantly reduced. Additionally, Medicaid may not cover all types of care or provide the level of care desired. In many cases, family members have to step in to help provide care...an emotionally and financially taxing option.

Unfortunately, people who do not plan ahead for the cost of long-term care and do not have the funds available for the care they need, live a comparatively diminished life and may force loved ones to become full-time caregivers, sacrificing their own quality of life.

What are the different ways to pay for long-term care?

There are several ways to pay for long-term care:

- Long-Term Care Insurance: LTCI can cover or help cover the cost of care in the desired setting...at home, in an assisted living facility, or in a nursing homes.
- Personal savings: Often those without a Long-Term Care Insurance plan use personal savings or retirement monies to pay for care...a financially draining method.
- Family support: Relying on family members to provide care or assist with covering the costs is an option though one that if not planned for can lead to financial strain.
- Medicaid: There is a joint federal and state program that will cover long-term care costs for anyone with limited income and exhausted assets, but only after all financial resources have been depleted.
- Veterans benefits: Most veterans are eligible for long-term care services through the U.S. Department of Veterans Affairs (VA).

How can I use my retirement savings to pay for long-term care?

When long-term care is required, retirement savings such as funds in 401(k)s, IRAs, and/or other investment accounts can be used to pay for the costs. To do this, the money would be withdrawn from a retirement account and directly used to pay for the care...but keep in mind this could deplete savings very quickly, particularly when a high level of care is required or desired. Subsequently, retirement account withdrawals may be subject to taxation, further depleting savings. A forward thinking plan is important to ensure retirement funds last a lifetime.

When is the best time to buy long-term care insurance?

The best time to purchase a Long-Term Care Insurance policy is in the years between 50 and 60, but certainly, a policy can be purchased earlier or later in life. Optimally, the younger coverage is gained, the lower the policy premium. Furthermore, purchasing insurance at a younger age improves the chance of qualifying for coverage, as insurers employ age limits and health and wellness requirements. When waiting too long, higher premiums and difficulty qualifying can become an obstacle to coverage.

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Long-Term Care FAQs