Today, almost 80% of Americans are living beyond age
65. Forty percent of Americans age 65 or older will require Long Term Care
before death.
Long Term Care is defined as: care required over an
extended period of time for a chronic illness or disability. It is not
limited to Nursing Home Care for the elderly. Some reasons younger people
might need Long Term Care would be due to serious accidents, gun shot
wounds, nervous system diseases such as Multiple Sclerosis, stroke, birth
defects, brain tumors and AIDS.
Today, actual Nursing Home Care is only about 20% of Long
Term Care. Terms like Long Term Care and Nursing Home are not synonymous.
Eighty percent of Long Term Care is delivered outside Nursing Homes. Long Term Care
can be given in one or a combination of different settings. Some of these
settings for a confinement would encompass Nursing Home, Assisted Living
Facility, hospice Care Center, Alzheimer’s Facility and Alternate Care
Facility.
The stay in an average Nursing Home costs upwards of
$35,000 per year and neither Medicare, private supplemental insurance,
group health insurance or individual medical insurance policies will
completely cover this cost. Private medical insurance has a big hole in it
because like Medicare and Medicare Supplemental insurance, it only pays
for “Skilled Care.” When acute care becomes chronic, and a patient is
not making progress, the use of a Nursing Home and Home Health Care are
discontinued. Medicare only pays for short term skilled care defined as
requiring daily care by a physician. In 1994, Medicare actually paid less
than 11% of the nation’s annual Nursing Home expenses. More than half of
Nursing Home care expenses are paid out of pocket by individuals and their
families. A large number of people who begin paying for Long Term Care out
of their own pockets are impoverished within six months, and they are
forced to turn to Medicaid for help.
Medicaid accounts for almost 50% of all payments to
Nursing Homes and Long Term Care facilities. Medicaid is a state and
federally funded welfare program that provides help with medical expenses
to the aged, blind and disabled poor. To qualify for Medicaid, applicants
must have spent their assets down to the poverty level.
Most people are not aware that Long Term Care insurance
exists. Those that are aware overestimate its cost. When considering Long
Term Care insurance, “education” is the key. The decisions we make
today, are the decisions we will live with tomorrow.
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