Long-term care insurance (LTC or LTCI), helps provide for the cost of long-term care beyond a preset period. Long-term care insurance covers care usually not covered by health insurance, Medicare, or Medicaid. Individuals who require long-term care are unable to perform the basic activities of daily living (ADLs) such as dressing, bathing, eating, toileting, continence, transferring (getting in and out of a bed or chair), and walking. Statistics show about sixty percent of individuals over age 65 will require at least some type of long-term care services during their lifetime.
Long-term care insurance generally covers Home Health care, Independent Living (if assistance is needed with ADL’s), Assisted Living, Adult Day Care, Respite Care, Hospice care, Skilled Nursing Facility care, and Memory Care up to the policy benefit maximum. Premiums paid on a long-term care insurance product may be eligible for an income tax deduction.
Private Long Term Care Insurance is becoming more popular. However, premiums have increased even for existing policy holders. Coverage can be quite expensive depending upon the age and gender of the person purchasing the policy. Women’s premiums are approximately 40% higher due to their increased claims. Tax qualified (TQ) policy requires that a person requires care for at least 90 days, and is unable to perform two or more activities of daily living, or ADL’s, (eating, dressing, bathing, transferring, toileting, continence) without hands on or stand by assistance. Assistance can also be required due to severe cognitive impairment. A doctor must provide a plan of care. Benefits from a TQ policy are non-taxable. There are non-tax qualified long term insurance plans which have less stringent criteria.
If you do not have any coverage for nursing care, you, or your family, will be responsible for the bills. Medicare only covers short term or intermittent care at home or in Rehab. Medicaid covers Long Term Care, but has very strict income and asset requirements. Qualification rules vary by state. Skilled Nursing Facilities can charge over $50,000 a year. These costs cover only room and board. Any supplies such as diapers, lotions, etc. are not covered. Medication is not covered either. The problem with planning for this expense is that we really have no way to predict our care needs in the future. Long Term Care insurance is one tool to protect a lifetime’s worth of assets.
Orlando's Senior Help Desk is a free service of the Jewish Pavilion. We are financially supported by our generous sponsors and participating communities. Information provided is not to be considered medical or financial advice and users should consult with a licensed professional before making any final decisions. Orlando's Senior Help Desk and the Jewish Pavilion complies with the Can-Spam Act of 2003.
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