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Long-Term Care Insurance

Long-term care refers to the medical and/or personal care services required by a person with a chronic disability or illness. Seven in 10 Americans age 65 or older will need some type of long-term care, according to the U.S. Department of Health and Human Services.

While a nursing home is often what comes to mind when you think of long-term care, most services are provided at home, in adult day health care facilities or in assisted living facilities. According to the “2017 Genworth Cost of Care Survey,” the median annual costs for these services are:

Homemaker services: $47,934

Home health aide: $49,192

Adult day health care: $18,200

Assisted living facility: $45,000

Nursing home semi-private room: $85,775

Nursing home private room: $97,455

Who pays the cost of long-term care? The patient or family pays for nursing home care costs not paid by Medicare or Medicaid. Medicare offers limited coverage for up to 100 days in a skilled nursing facility per benefit period, and benefits may not be available for home care. For those with low income and limited resources, Medicaid may pay for some long-term care services at home or at another facility. To qualify for Medicaid, the patient must be impoverished under the state's definition. In most states, the patient must not have income greater than the cost of the nursing home facility. Other states have "income caps" to limit eligibility for Medicaid.

The need. Some people may require daily medical attention, while others may simply need help with the basic activities of daily living (ADL) such as bathing, dressing, taking medication, eating, using the toilet, getting in or out of bed, or walking. A typical nursing home stay commonly falls into two categories: short-term stays (one to three months), which involve skilled nursing care and typically follow a hospital confinement; and lengthy stays that average 2.5 years and include mostly maintenance and custodial care.

Levels of Care

Skilled care. Refers to a patient who needs daily nursing care, physical therapy, etc., provided or supervised by a professional nurse and/or therapist under physician's orders.

Intermediate care. Patient requires only intermittent or occasional rehabilitative care or nursing.

Custodial care. Patient needs help with activities of daily living (ADL). Does not require a registered nurse or therapist, but need for such care is based on physician's orders.

Long-Term Care Insurance. Policy may be issued on an individual or a group basis. Long-term care insurance policies reimburse policyholders a daily amount (up to a pre-selected limit) for services to assist them with activities of daily living (ADL). Long-term care insurance is designed to cover long-term services, including personal and custodial care in a variety of settings.

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