What exactly is long-term care insurance? It is not health insurance, but it does what health insurance cannot do. It protects against the fear of losing two of your greatest treasures as you age: Control over your life, and control over your assets. Simply stated, it's an insurance policy that pays to help you maintain your quality of life as you become older. For example, if you have a hip or knee replaced, or contract a debilitating disease, you will need assistance with all the activities of daily living, such as bathing, dressing, going to the market, etc. Why do I need long-term care insurance? Many of us are blissfully ignorant about what long-term care is, what it actually costs, and who pays for it. We think that our existing insurance will pay for LTC, or Medicare and/or Medicaid will cover us. This perception is dangerous! Medicare requires a minimum of a 3-day hospital stay, followed by a stay in a skilled care facility or rehabilitation center. It pays for the full cost of care for the first 20 days, and tapers off to zero after 100 days. It covers only part-time home health care, it does not cover custodial care, and the patient must be homebound. Medicare is clearly not the answer! Medicaid requires you to be medically indigent. It is intended to be a safety net for the poor. In order to qualify for Medicaid, a person must spend their assets down to the poverty level. In New Jersey, all your income cannot exceed $2050 per month. Your assets are limited to $4000.00, you must check with local authorities before filing claims, and the Estate Recovery Act (which is now mandatory) allows the State to recapture Medicaid expenditures from your heirs. Medicaid is also not The Answer. Health Insurance only pays for restorative care, not chronic care such as that required for a long-term illness like Alzheimer's or Parkinson's Disease. Compounding the problem, people are living longer than ever due to the miracle of modern medicine. Consequently, we are finding that providing for an elderly parent or other relative takes a heavy toll emotionally, physically, and financially. Having LTC Insurance will spare your family this toll. How does LTC Insurance help? LTC insurance allows you to protect and retain control of the assets which you've spent your entire working life accumulating. How does it do this? LTC insurance provides dollars in the event that you require assistance while you are in your home (home health care), or require an assisted living facility or a nursing home. Instead of funding expenses out-of-pocket, consequently "spending down" your assets, LTC would indemnify a third party. For example, by directly paying your assisted-living facility or skilled nursing home for care and services, you are spared the potentially high cost of such services. LTC Insurance is The Answer if: You do not want to burden your children, relatives, or friends You want to preserve your independence You want the freedom to choose your own place to receive care You want to protect your assets You want guaranteed affordability IMPORTANT: If you already have LTC Insurance, it's important to have your policy reviewed every few years to make sure it is keeping pace with technology. As time goes on and things become more advanced so do insurance policies. Your existing policy may not cover new medical techniques simply because they were never envisioned when your policy was written.
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