Best Guide to Long-Term Care Insurance For 2022

Medicare does not cover both the nursing homes and the in-home care services even though they are costly. The cost of a nursing home stay can be as high as $100,000 per year or more in different parts of the U.S., and you may need long-term care services because this can drain your retirement savings faster.

LTC or long-term care insurance is a type of insurance that can cover either in-home care or nursing home care services of you or your spouse who can no longer dress, bathe, eat or perform other daily living activities. LTC insurance may be costly, and it is not meant for everyone. Let’s have a quick brush-through over what it means, what it covers, and how you can keep the costs of LTC in line.

What Is Long-Term Care Or LTC Insurance?

Many health insurances cover different things like medical procedures, prescription drugs, hospital stays, and doctors’ office visits and they do not cover nursing home stays or other long-term services. Those that are not covered by these health insurances are covered by long-term care. Medicare, on the other hand, covers some in-home care or short stays in nursing homes under specific conditions.

The design of long-term care is to cover these types of expenses. It can also cover other things like home health help to assist the client with dressing, bathing, or eating, in addition to nursing homestays.

What Are The Things That Long-Term Care Insurance Cover?

In addition to nursing home stays, there are many other things that LTC policies covers. Some of which are care in the home (like physical and occupational therapy, skilled nursing care, and personal care aid), assisted living facilities, Alzheimer’s care facilities, adult daycare centers, Hospice, and respite care services, and home modification (like grab bars and wheelchair ramps for easy movement).

The policies of LTC show that you must have waited for your policy’s elimination period and must have met the “benefit trigger” before it starts paying you benefits. This policy is defined in terms of ADLs (or Activities of Daily Living), and it starts paying once you need help with one or more ADLs including dressing, bathing, and eating.

Why Long-Term Care (Or LTC) Insurance Could Be A Great Idea

As mentioned above, LTC services are expensive, and they are not likely to be covered by other medical insurance forms. For example, if you are living in a place where a home health aide costs $49,993 per year or $21.85 per hour on average like in South Carolina, an in-home registered nurse may charge an average of $73.40 per hour. In an assisted living facility, a one-bedroom unit costs $49,969 per year, and a single private room in a nursing home may be as high as $84,279 per year or $231 per day. This is not much as compared to New York where a private room in a nursing home is as high as $143,000 per year! It is a great idea to go for LTC especially if you are receiving long-term services before.

Long-Term Care Insurance Is Not Cheap

What makes people run away from LTC is the cost; little did they know that it is cheaper than the benefits you will get from it. Below are some of the variables that determine what your LTC cost covers:

  • Your age when you buy the LTC policy (it is better to join when you are younger)
  • The maximum amount of benefit you will receive per day; while some request for the different amount of money, others have a flat-rate benefit on top of any service they are rendering.
  • The maximum amount of time they will pay out benefits; the common time frame is two to five years.
  • A waiting period (or elimination period) or lack thereof; the common waiting periods are 30-, 60-, and 90-day elimination periods.
  • Inflation protection and other policy features

How To Keep LTC Costs Low

The best way to have a lower cost is to join the policy earlier. By joining them at the age of 55, you will pay the same cover price as those at age 65. Also, having a longer elimination period will also help you save money. You must also not overbuy LTC insurance. Lastly, see if your employer will help you buy LTC insurance plans. This is because plans sponsored by employers are usually at a discounted rate and you will have to maintain the policy after you leave employment.

The Bottom Line

Long-term care insurance is the best option for most retirees to protect them against the high costs of assisted living, nursing homes, and in-home health services. If you think paying a few thousand dollars annually is a fair price you can pay for your health, LTC insurance is a better option for you.

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