Long term care (LTC) insurance provides financial protection for people that have become unable to care for themselves because of a chronic illness, physical incapacity, or cognitive impairment, such as Alzheimer’s disease, and are treated in a setting other than a standard hospital.
The cost of LTC insurance does vary from insurance company to insurance company. However, some states require that every LTC policy in their state must be guaranteed renewable for life (as long as premiums are paid). While premiums may increase, some states require that any increase be based on the claims history of all state subscribers as a whole and not on the claims of any one person.
Many people with long term care are in nursing homes. There is also Continuing Care Retirement Communities (CCRC) as well as other assisted-living residences available to those in need of care. Nursing homes, CCRC’s and other forms of assisted-care residences charge a fixed daily fee that varies according to geographic location and other factors.
Medicare does provide assisted-living health care benefits on a short-term in-house basis if it is medically necessary and in a facility that is licensed to provide medical care.
Most of the long-term care insurance policies will also cover in-house medical care.
In-house health care paid with your own private funds is tax deductible on US tax returns.
It is a good idea to make plans for the possibility of long-term care while you are still young. I encourage you to do some research, get some quotes, and look for a good deal.
It is important to understand that CCRC contracts are a serious matter. Do not sign a CCRC agreement unless you are very sure you fully understand all the terms of the agreement. Make sure you understand the entrance and maintenance fees, and make sure there are no hidden charges. At times, CCRC agreements require you make arrangement for a separate short-term or long-term health insurance policy.
Investigate any long term care facility and the company that manages it. Check their reputation, credibility, and confirm their licensing. Check complaints that may have been filed against them at state government and other government regulatory agencies including any government consumer affairs agency where you live. The Continuing Care Accreditation Commission may be able to help you.
Understand that long term care is a serious matter and should be approached as such. However, with careful planning, your concerns can be addressed to your satisfaction.
