Long term care may affect you or your loved one. You need to know what it's all about so you can start taking action based on your circumstance. So here's a quick overview.
What do we mean by long term care? It means you need help performing your activities of daily living (ADLs). Examples are dressing, bathing, toileting, eating and continence for the foreseeable future.
Who would provide this help? Long term caregivers do. They're divided into skilled and custodial caregivers. Custodial caregivers are aides, volunteers, family or friends. Generally heath care plans will pay for care provided by skilled caregivers (medical specialist like doctors, nurses, etc) and custodial services but only if given as part of a skilled care procedure.
Where can LTC be provided? You can receive LTC in your home, at an adult day center, an assisted living facility, a hospice facility or at a nursing home.
What are typical costs for these services? It really depends on where you're living and what you're receiving for care. But ballpark annual costs may be $25,000 for home health care, $40,000 for assisted living base rate, and $80,000 or more for nursing home costs
Who pays for LTC costs? LTC costs are paid by either you, Medicaid, or from a LTC insurance policy. Medicaid will pay only if your assets and income are very low. If Long Term Care Insurance is to pay, you'll have had to purchase the policy and pay the premiums until you qualify for LTC.
What are the Long Term Care insurance benefits? This depends on your policy. Benefit payments may include payment for various LTC receiving locations (home, assisted living, etc), Daily Benefit Amount (DBA) i.e how much they'll pay per day in a nursing home, the duration of LTC (number of days of care) they'll pay, and any inflation adjustments.
How much are LTC insurance premiums? That depends on your policy choice. Premium costs, though, generally increase the older you are when you purchase the policy. And choosing more, larger or longer lasting benefits will generally increase premium costs too.
Who should not buy LTC insurance? Anyone who can't maintain paying the premiums until they qualify for LTC shouldn't purchase it. Premiums for guaranteed renewal insurance may increase with time.
When do you become eligible to receive LTC? It depends on the guidelines for who is paying the benefit costs. Under a tax qualified LTC insurance policy, a licensed health care practitioner must certify you as chronically ill (i.e. you can't perform some number of activities of daily living for an expected 90 days or you have a severe cognitive impairment.) and that a plan of care is in place for you.
Now you know the basics. Give us a call or fill out the card so we can help you get started on creating a plan for your LTC possibilities.
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This article is not intended to provide tax or legal advice and should not be relied upon as such. It is a summary of our understanding and interpretation of some of the current laws and regulations and is not exhaustive. Investors should consult their legal or tax advisor for advice and information concerning their particular circumstances.
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