Long term care may soon be the biggest financial need in America. Should you consider buying Long-Term Care Insurance? What is Long-Term Care anyway?
The world of Long-Term Care Insurance (LTCI) is complex and constantly evolving. There are three general levels of long-term care: skilled nursing care, intermediate care, and custodial care. Most long-term care is in fact custodial care. This type of care is often provided while recipient is at home. Though this care is not medical in nature, it is necessary for the health of a person: it includes assistance with bathing, moving around, eating, etc…
Once the recipient moves to an LTC facility, the level of care increases to intermediate or skilled nursing care. Many people mistakenly believe that their long-term care needs will be covered by Medicare or Medicaid. In reality, Medicare does not cover long-term care. Medicare will provide very limited nursing home benefits if certain conditions are met. Medicaid is a form of welfare, which, in addition to medical qualifications required to qualify for benefits, an individual must “spend down” the assets to the level that will make a person eligible for Medicaid-covered long-term care.
So, should you be looking into private insurance to purchase a policy for your future potential long-term care need?
Your personal financial situation is one of the key factors in determining your need for Long-Term Care policy. If you are wealthy, you might not need LTCI, since you are able to pay any expenses out of pocket. If you are very poor, LTCI would not make sense either, since the cost of coverage is likely to be too high. These are generalized and very broad assumptions that you might consider to make your decision about purchasing a Long-Term Care policy. Among other factors are the quality and availability of LTC, premium cost, assets and income protection, and maintaining personal choice.