Healthcare Crisis in America
A health care turmoil is looming on the horizon for many Us citizens, one that could bring financial and emotional devastation that would make zooming gas prices and bouncing share markets pale in comparison.
The problem? According to Metlife, 70% of people over the age of sixty-five will need some form of extended care before they die, whether it’s a going to nurse in the home or full-time nursing home care. According to The Alliance regarding Aging, “nearly 9 out of 10 Americans will have at least one chronic condition” by age 65. Thanks to contemporary medicine, these conditions are debilitating, but not immediately fatal. Most senior citizens express concern about paying for essential care in the face of such a condition, but few do anything about it.
Laura Moore, senior vice president intended for long term care insurance at David Hancock, says the issue is “increasingly important because Americans are living longer, care costs are rising, and corporation pensions are being cut back. ” Moore says that Americans are “not facing the reality of what is situated ahead. ”
If you need extended treatment, but are unable to pay for it, the burden may fall to your families. The psychological, physical, and financial drain associated with caring for a sick parent is really traumatic that, according to the American Alzheimer’s Foundation, 60% of family care givers die before the person these are caring for! Furthermore, if you are placed in the nursing home without the funds to pay the bill, you risk not only your life long savings, but also your family home and even your life insurance.
Knowing Long Term Care
Long term or prolonged care refers to care that is needed beyond the time period covered by Medicare or even major medical insurance. It is often provided in the nursing home, but can also be offered in a person’s home or in an assisted living facility.
The cost of assisted living, nursing home care and professional home health care is higher and climbing yearly. A 2003 study conducted by Metropolitan Life insurance coverage found the average rate to be $180 per day or $66, 000 each year for a private room in a nursing home. Care in an assisted residing facility averages $30, 288 a year while professional home care might cost $166, 440 a year for round the clock care at $19. 00 per hour. Due to inflation, by 2021, nursing homes may cost as much as $175, 000 per year.
There are three methods to surviving these high costs associated with extended care. You can be rich enough to pay all costs yourself, engage in a spend down to exhaust your assets and qualify for Medicaid, or you can purchase Long Term Care insurance (LTCi).
Long Term Care Insurance
LTCi is definitely an insurance program that pays for extended care when Medicare and private major medical is exhausted, or for intermediate or custodial care which are not covered by Medicare or major medical at all. The most extensive programs cover home care, aided living, and nursing homes. Simpler plans provide home care only and are also less expensive.
The care usually entails assistance with daily activities such as eating, dressing up, walking, bathing, moving from bed to chair (called transferring) and using the toilet, or, in the case of cognitive impairment, simply sitting with a person to prevent him from danger to himself.
Regardless of the type of plan preferred, it’s like any other kind of insurance. You can not purchase it once you actually need the particular care.
Making the Decision for Long Term Care Insurance
Two factors that maintain people from taking LTCi really are a refusal to accept the possibility that they might really need it some day and the perception of the insurance as “costly. ” When you may indeed never need it, if you live a long life, the odds are usually that you will. The cost of having it and not using it is far less than that of needing it but not having it.
The objection most people raise in order to purchasing LTCi is the cost. It really is perceived as “expensive, ” and perhaps it really is, especially if you wait until you are in your own 70’s to try to get it.
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However , whenever tempted to procrastinate, ask yourself if you could afford a bill of about $4000 per month on what you have today. Whenever you retire, are you likely to have more disposable money or less? Wouldn’t this be better to pay a premium averaging $900 to $2000 per year now instead of face the possibility of having to pay twice that each month if you need care? According to Medical News Today, “LTCi can be quite inexpensive, especially if you buy at a relatively early age. ”
Relying on Medicaid to Pay the particular Bill
Medicaid is a state and federal program for people who are at the poverty level, or who have certain physical conditions. According to a 2003 report from the American Council of Life Insurers, Medicaid pays only 17% of America’s LTC bill. LTCi presently pays the bill for about 5% of those with coverage. A whopping 58% of the LTC bill is being paid by private individuals who are being forced to whittle away their assets to get the care they need.
In order to qualify for Medicaid to receive care in a state-run nursing home, you have to be below a certain income level and can own just limited property. The rules vary simply by state, and new laws are making it increasingly difficult to qualify. No longer, for example , can you transfer your property to your children and then enter the nursing home. Most states have a 3 to 5 year look back period with a stiff accompanying penalty when you have attempted such a transfer.
The Medicare Misconception
Many people mistakenly believe that Medicare health insurance will pay their nursing home costs.
Medicare covers hospitals and experienced nursing facilities for a limited period of time. Medicare will pay for 100 times of skilled care in a skilled medical facility–with a co-pay for days 21 through 100–if you are admitted to the facility within a 30 days of leaving a hospital and have been hospitalized for the same condition for at least 3 days. A medical professional has to approve that you need this care.
Medicare will pay for skilled nursing care in your home if the care is provided by a licensed home health care agency, but you must be confined to your home, under the care of a doctor, as well as the care must be intermittent or part-time. Medicare does not cover housekeeping solutions, personal care services like assist with bathing, dressing and other activities, dinner delivery, or full-time nursing care in the home.