There are many people who incorrectly assume that long term care will be covered for by their health insurance, Medicaid, Medicare, or some other form of private insurance. However, in most cases, these people will pay for their long term care out of the money from their own pocket or their children’s. The costs of long term care are almost always unaffected by private health insurance and Medicare.
Private health insurance policies provide coverage for health care and hospitalization, but not for the assistance with activities of daily care, such as what you would experience if you were in an assisted living care home. Medicare only covers 100 days of rehabilitation in a nursing home, but doesn’t cover assistance with the activities of daily life. Disabled and elderly people with low incomes may be able to use Medicaid to some extent, but that’s only after they have spent down almost all of their assets and money. The long term benefits are usually only available in a nursing home setting, which may not fit for everyone who is trying to get Medicaid to cover their care.
Obviously, the only alternative to covering this kind of care is to make use of long term care insurance. Long term care insurance policies are able to cover the costs of assistance for daily activities. The policies start working when a policyholder needs help with two or more of the activities. Your premium amount is determined by three different factors. These factors include the length of coverage, the daily benefit amount that will be paid out, and the level of inflation protection that has been built into the policy. However, long term care policies may be fairly expensive and may only be continuing to rise unless some change happens to the industry soon.
One new alternative has occurred within the past few years. Lately, life insurance policies with long term care riders have become an option. These policies would allow for a payout for heirs if the individual does not use up their long term care benefit. Therefore, unlike some of the traditional long term care policies from years ago, there is value to this policy even if you don’t end up using it for long term care itself. However, there are some detractions. Benefits tend to be less provisional than those that are in long term care policies. Consumers also need to make a large payment in bulk in order to be able to obtain this kind of coverage -- this is done instead of paying an annual premium. That may be more convenient for some people, but it may be more of a financial burden for others. Ultimately, there are ways to pay for long term care insurance coverage, but people must become aware that they cannot cover these costs with options like private health insurance, Medicare, or Medicaid. The more aware that people become of the reality of paying for long term care, the more they will realize the advantage in researching their options.