Although your focus is probably
on providing care for your loved one, it’s important to think about
and prepare for your own future caregiving needs. Long-term care
insurance (LTCi) is a hot topic these days as the more than 76
million baby boomers approach retirement. Statistics say that one
out of every two elderly Americans will need long-term care, yet
unfortunately, most baby boomers have done little in terms of
planning for the care they likely will need in the future.
With the increasing population
of elderly Americans, longer average life spans and increasing costs
of health care, it’s wise to consider LTCi as an option for when
you’ll someday need extra care yourself.
Planning for Long-Term Care
LTCi is a separate insurance
policy that covers costs that arise when an individual needs
on-going care including home care, hospice care, nursing home care
or care in an apartment in an assisted-living facility.
Although LTCi probably isn’t
high on most Americans’ lists of priorities, it probably should be.
Statistics show that 72 percent of elderly Americans are
impoverished after paying for one year of long-term care.
The average cost of a private
room in a nursing home in the U.S. is $69,400 a year according to
the Genworth Financial 2005 Cost of Care Survey. And if an
individual wishes to remain in his/her own home, versus entering
institutionalized care, the national average rate for a home health
aide is $18.58 an hour or $446 a day for round-the-clock care.
If you think that the government
or your health insurance will cover these costs, you’d better think
again.
The majority of long-term care
costs are not covered by Medicare or most health insurance plans.
Medicare only covers skilled and rehabilitative care (doctors and
nurses) and does not cover custodial care including help with
activities of daily living (ADLs). Medicaid will cover the cost of
care but only after an individual has depleted all their assets.
Many elderly Americans end up
relying on family members to provide care. Some end up depleting all
their assets and going on Medicaid resulting in a coverage that
restricts where an individual receives care. With a little planning
and available funds to cover LTCi premiums, most Americans can avoid
burdening their family with their long-term care needs and still
leave some assets behind.
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