The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. Coverages and programs discussed may or may not be available in your state.
Recently someone asked me what I knew about Long Term Care insurance, and whether or not I thought it was a good thing to buy.
The answers to that are a little, and yes.
Why buy it?
Because generally Medicare doesn’t pay for long term care. They only cover nursing home costs under very specific conditions for a very short period of time, and eventually they stop paying at all.
And most long term care isn’t as an inpatient in a nursing home, it’s at home for what they call “custodial care” or “activities of daily living” – toileting, bathing, dressing, eating, transferring (getting into and out of bed) and continence. Medicare doesn’t cover that at all.
Long Term Care Insurance (LTC) starts covering if you can’t do two out of the six activities of daily living for a period of (usually) at least 90 days. Coverage can also be triggered if you require substantial supervision because of a cognitive impairment (like Alzheimer’s). It can cover care at home, in a nursing home or in the community (i.e. Adult Day Care). You also have to be eligible and pay for services for an Elimination period (which you choose). You can also choose how long the policy will pay (usually 3 years, 5 years and lifetime).
Some people think they can just go on Medicaid. They can, but not unless they meet very specific guidelines on assets and income. Many people think they can just give their assets to their kids to protect them, but you can’t. There are HUGE penalties if you try to do this.
In my opinion LTC is very important if you want to protect your kids from having to foot the bill, and if you want to have an estate to pass on to them. Sure, you can sell your house to pay your expenses. Nursing homes cost about $150-$160 a day now, which is $55k – $58k a year. My grandmother was in a nursing home for twelve years before she passed.
Many people thing they don’t need Long Term Care because they have family that can take care of them. But is that a burden you really want to place on them? That’s a position I never want to put Son in. He’ll want to, he’ll even do it, but what kind of life would that be for him?
And I never want my son to have to wipe my tushy. Dignity is important to me, and it would already be a huge blow to mine to have someone else do that. I would be mortified if that someone else was my son.
I want my son to live his life, not spend it taking care of me.
My Dad has LTC, thank goodness, and my Mom would qualify for Medicaid without having to divest any assets (the one advantage to her poverty). You can bet that my husband and I will get LTC, probably when we turn 55.
Either that or we’ll retire to Guam. If you have to be sick, might as well be sick in a tropical paradise.