Healthcare Crisis in America
A health care turmoil is looming on the horizon for many Americans, one that could bring financial and emotional devastation that would make cruising gas prices and bouncing share markets pale in comparison.
The problem? According to Metlife, 70% of people over the age of 65 will need some form of extended care before they die, whether it’s a visiting nurse in the home or full-time medical home care. According to The Alliance to get Aging, “nearly 9 out of 10 Americans will have at least one chronic condition” by age 65. Thanks to contemporary medicine, these conditions are debilitating, but not immediately fatal. Most senior citizens express concern about paying for required care in the face of such a condition, yet few do anything about it.
Laura Moore, senior vice president to get long term care insurance at David Hancock, says the issue is “increasingly important because Americans are living longer, care costs are rising, and corporation pensions are being cut back. ” Moore says that Americans are “not facing the reality of what is situated ahead. ”
If you need extended care, but are unable to pay for it, the burden can fall to your families. The emotional, physical, and financial drain associated with caring for a sick parent is so traumatic that, according to the American Alzheimer’s Foundation, 60% of family care givers die before the person these are caring for! Furthermore, if you are placed in a nursing home without the funds to pay for the bill, you risk not just your life long savings, but also your family home and even your life insurance.
Knowing Long Term Care
Long term or extended care refers to care that is required beyond the time period covered by Medicare or even major medical insurance. It is often provided within a nursing home, but can also be offered in a person’s home or in an assisted living facility.
The cost of aided living, nursing home care and professional home health care is high and climbing yearly. A the year 2003 study conducted by Metropolitan Life Insurance found the average rate to be $180 per day or $66, 000 each year for a private room in a nursing home. Care in an assisted living facility averages $30, 288 per year while professional home care would cost $166, 440 a year with regard to round the clock care at $19. 00 per hour. Due to inflation, by 2021, nursing homes may cost as much as $175, 000 per year.
There are three strategies to surviving these high costs associated with extended care. You can be rich enough to pay all costs yourself, participate in a spend down to exhaust your own assets and qualify for Medicaid, or you can purchase Long Term Care insurance (LTCi).
Long Term Care Insurance
LTCi is definitely an insurance program that pays for extended care when Medicare and private major medical is exhausted, or for intermediate or custodial care which are not covered by Medicare or even major medical at all. The most extensive programs cover home care, assisted living, and nursing homes. Simpler plans provide home care only and are also less expensive.
The care usually consists of assistance with daily activities such as eating, outfitting, walking, bathing, moving from mattress to chair (called transferring) and using the toilet, or, in the case of cognitive impairment, simply sitting with a person to prevent him from danger to himself.
Regardless of the type of plan preferred, is actually like any other kind of insurance. You can not purchase it once you actually need the particular care.
Making the Decision for Long Term Care Insurance
Two factors that maintain people from taking LTCi are a refusal to accept the possibility that they might actually need it some day and the perception of the insurance as “costly. ” As you may indeed never need it, if you live a long life, the odds are that you will. The cost of having it but not using it is far less than that of needing it but not having it.
The objection most people raise to purchasing LTCi is the cost. It is perceived as “expensive, ” and perhaps it really is, especially if you wait until you are in your 70’s to try to get it. However , when tempted to procrastinate, ask yourself if you could afford a bill of about $4000 per month on what you have today. If you retire, are you likely to have more disposable money or less? Wouldn’t this be better to pay a premium averaging $900 to $2000 per year now rather than face the possibility of having to pay twice that each month if you need care? According to Healthcare News Today, “LTCi can be quite inexpensive, especially if you buy at a relatively young age. ”
Relying on Medicaid to Pay the Bill
Medicaid is a state and federal plan for people who are at the poverty degree, or who have certain physical problems. According to a 2003 report from the American Council of Life Insurance providers, Medicaid pays only 17% associated with America’s LTC bill. LTCi currently pays the bill for about 5% of those with coverage. A whopping 58% of the LTC bill is being compensated by private individuals who are being forced to whittle away their assets to receive the care they need.
In order to be eligible for a Medicaid to receive care in a state-run nursing home, you have to be below a specific income level and can own only limited property. The rules vary simply by state, and new laws are making it increasingly difficult to qualify. No more, for example , can you transfer your assets to your children and then enter the nursing home. Most states possess a 3 to 5 year look back period with a stiff accompanying penalty for those who have attempted such a transfer.
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The Medicare health insurance Misconception
Many people mistakenly believe that Medicare will pay their nursing home bill.
Medicare covers hospitals and competent nursing facilities for a limited period of time. Medicare will pay for 100 times of skilled care in a skilled nursing facility–with a co-pay for days 21 through 100–if you are admitted towards the facility within a 30 days of departing a hospital and have been hospitalized for the same condition for at least three days. A medical professional has to approve that you need this care.
Medicare will pay for skilled nursing care in your home when the care is provided by a licensed home health care agency, but you must be restricted to your home, under the care of a doctor, and the care must be intermittent or part-time. Medicare does not cover housekeeping providers, personal care services like help with bathing, dressing and other activities, meal delivery, or full-time nursing treatment in the home.