Health Care Crisis in America
A health care crisis is looming on the horizon for many Americans, one that could bring financial plus emotional devastation that would make zooming gas prices and bouncing stock 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 going to nurse in the home or full-time medical home care. According to The Alliance for Aging, “nearly 9 out of ten 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 for long term care insurance at Ruben Hancock, says the issue is “increasingly essential because Americans are living longer, treatment costs are rising, and business 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 may fall to your families. The psychological, physical, and financial drain associated with caring for a sick parent is really traumatic that, according to the American Alzheimer’s Foundation, 60% of family treatment givers die before the person they are caring for! Furthermore, if you are placed in a nursing home without the funds to pay 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 needed beyond the time period covered by Medicare or even major medical insurance. It is often provided inside a nursing home, but can also be provided in a person’s home or within an assisted living facility.
The cost of assisted living, nursing home care plus professional home health care is high and climbing yearly. A 2003 study conducted by Metropolitan Life Insurance found the average rate to be $180 per day or $66, 000 per year for a private room in a medical home. Care in an assisted residing 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 methods to surviving these high costs of extended care. You can be rich sufficient to pay all costs yourself, take part in a spend down to exhaust your assets and qualify for Medicaid, you can also 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 treatment 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 programs provide home care only and are generally less expensive.
The care usually entails assistance with daily activities such as eating, outfitting, walking, bathing, moving from mattress to chair (called transferring) and taking advantage of the toilet, or, in the case of cognitive disability, simply sitting with a person to prevent him from danger to themselves.
Regardless of the type of plan preferred, they have like any other kind of insurance. You cannot 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 from the insurance as “costly. ” When you may indeed never need it, if you live a long life, the odds are usually that you will. The cost of having it rather than using it is far less than those of needing it but not having this.
The objection most people raise in order to purchasing LTCi is the cost. It really is perceived as “expensive, ” and perhaps it is, especially if you wait until you are in your own 70’s to try to get it. However , whenever tempted to procrastinate, ask yourself if you could afford a bill of about $4000 per month on what you have today. Once you retire, are you likely to have more throw away money or less? Wouldn’t it be better to pay a premium averaging $900 to $2000 per year now instead of face the possibility of having to pay twice that every month if you need care? According to Healthcare News Today, “LTCi can be quite affordable, especially if you buy at a relatively early age. ”
Relying on Medicaid to Pay the Bill
Medicaid is a state and federal program for people who are at the poverty level, or who have certain physical circumstances. According to a 2003 report by the American Council of Life Insurers, Medicaid pays only 17% of America’s LTC bill. LTCi presently 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 get the care they need.
In order to qualify for Medicaid to receive care in a state-run nursing home, you have to be below a specific income level and can own just limited property. The rules vary by state, and new laws are making it increasingly difficult to qualify. No longer, for example , can you transfer your resources to your children and then enter the nursing home.
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Most states have a 3 to 5 year look back period with a stiff accompanying penalty when you have attempted such a transfer.
The Medicare insurance Misconception
Many people mistakenly believe that Medicare will pay their nursing home costs.
Medicare covers hospitals and qualified nursing facilities for a limited period of time. Medicare will pay for 100 times of skilled care in a skilled medical facility–with a co-pay for days twenty one through 100–if you are admitted towards the facility within a 30 days of making a hospital and have been hospitalized for the same condition for at least 3 days. A medical professional has to certify that you need this care.
Medicare will pay for skilled nursing care in your home if the care is provided by a licensed house 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 services, personal care services like assist with bathing, dressing and other activities, dinner delivery, or full-time nursing care in the home.