Understanding Long Term Care Insurance

So, this is the year you were going to look into long-term care insurance. You thought about before, but insurance was the last thing you wanted to add to your budget. Hopefully, the following information will help you in this decision making process.


There does seem to be a misconception by some that Medicare and Medicaid (Medi-Cal in California) will take care of most long-term care needs. Here are the facts:

1. Most private health insurance plans follow the same general rules as Medicare. If any long-term care is covered, it is usually for only skilled, short-term and medically necessary care.
2. Home care is limited only to medically necessary skilled care. Non-medical homecare, aka custodial or personal care is not covered by health insurance.
3. The coverage in a Skilled Nursing Facility must follow a hospital stay and is limited up to 100 days. If you meet Med-Cal’s financial eligibility status, you must select a Skilled Nursing Facility (not Assisted Living) that accepts Medi-Cal.


Another option is utilizing your own assets, which most of us would want to do in order to maintain our independence. If this were a consideration, it would be important to know the costs (based on today’s dollar):

• In-Home Services (Assistance with Activities of Daily Living, including dressing, personal hygiene, bathing, etc.) – $57,200 annually (based on 44 hours/week)
Assisted Living –$51,000 annually (private/one-bedroom)
• Nursing Homes – $102,200 (semi-private) and $122,640 (private) annually

NOTE: Above numbers are based on the 2013 Genworth Cost of Care Survey


Long Term Care is not some distant chance that happens to an unfortunate few; rather it is a result of living in a body that does not die quickly. Yes, really difficult things happen like Alzheimer's disease or disability from a stroke. Here are some statistics to be aware of:

• About 70 percent of individuals over age 65 will require at least some type of long-term care services during their lifetime – U.S. Department of Health and Human Services
• Between 2010 and 2030, the age 75-84 group will increase by more than 86 percent, the age 85+ group by 57 percent, and the overall age 75+ group by 77 percent – U.S. Census Bureau
• Between 2000 and 2010, the death rate for Alzheimer’s disease increased by 39 percent, whereas death rates for other major causes decreased including Stroke (-36 percent), Heart disease (-31 percent), and Cancer (-32 percent). - – Centers for Disease Control and Prevention

Long Term Care Insurance could be the best investment one can make. Unless medically necessary, you can avoid Skilled Nursing Facilities by residing at Assisted Living Facilities, Residential Care Homes or at a home with the needed In-Home care. This type of insurance makes it much easier to cope with most otherwise uncovered health issues as you get older.

Long Term Care Insurance should be as important as your health care insurance, life insurance, homeowners insurance and even auto insurance. Matter of fact, following are some well documented odds comparing the need for long term care to other occurrences:

• Odds of Your Home Having a Fire: 1 in 1,200
• Odds of Your Auto Being Totaled: 5 in 1,200
• Odds of Being Hospitalized: 105 in 1,200
• Odds of Needing Long Term Care: 720 in 1,200

Generally, long-term care is needed for conditions that cannot be cured or healed, and for helping people with routine activities such as dressing, bathing, transferring, continence care, toileting and eating. Long Term Care Insurance extends for a long period of time, covering care for various types of dementia, including Alzheimer’s disease. Long Term Care Insurance, which can reduce the burden from your family and your peace of mind, should be a very serious consideration.

As you approach this step, consult with an experienced professional that preferably specializes in Long Term Care planning, offering a variety of products and companies. Within that specialization, they will know the product that fits you financially, now and in the future.

Thank you to Leslie Whiting for assistance with this article:
Leslie Whiting
Long Term Care Options