Types Of Insurance

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What is long-term care?
The phrase "long-term care" refers to a broad range of medical and personal services. Long-term care goes beyond standard hospitalization and nursing care, and includes all the assistance you could need if you are unable to care for yourself for an extended period of time. The need for such care could be the result of a chronic illness or disability, or it could arise because of physical or mental impairments that prevent you from performing basic activities of daily living (feeding and dressing yourself, bathing, etc.).

Long-term care is occasionally utilized by younger or middle-aged persons after an accident or debilitating illness. But by and large, long-term care services are used by seniors or those approaching their "golden" years.

What are the various types of long-term care?
For purposes of long-term care insurance (LTCI), there are three levels of long-term care. It is important to understand the distinctions between these levels, in order to ensure that the policy you buy includes the coverage you want.

Skilled care
Skilled care is continuous "around-the-clock" care required to treat a medical condition. It is ordered by a doctor and is usually delivered by a skilled medical worker (e.g., a registered nurse or professional therapist). A treatment plan is established and supervised by a doctor.

Intermediate care
Intermediate care is needed on an occasional basis (daily or a few times a week), but is not continuous. It is provided by trained medical workers under the supervision of a doctor. Intermediate care is less specialized than skilled care.

Custodial care
Ninety percent of all long-term care is custodial care, which provides assistance with activities of daily living (such as bathing, eating, and dressing). It does not require a doctor's orders, and can be performed by someone without professional medical skills. For example, someone who needs reminders to take medication on schedule may need custodial care.

Where is long-term care provided?
Most LTCI policies cover skilled, intermediate, and custodial care in licensed nursing homes. However, long-term care can be provided in a number of places, including your own home. LTCI policies may limit the additional facilities in which you can choose to receive care. If you are looking for LTCI, it is important to consider which types of facilities you are likely to need, so that you can purchase an appropriate policy. LTCI policies may allow you to receive long-term care in some or all of the following facilities:

Nursing homes
A nursing home must meet certain standards set by state governments in order to be considered a "qualified facility" (meaning that care received in the nursing home is covered by LTCI). Although many nursing homes specialize in custodial care, they can provide skilled care and intermediate care, as well.

Home care
Home health care includes a wide range of services, including skilled care, physical therapy, cleaning and bandaging of wounds, help with bathing and dressing, and even homemaking assistance in your own home. Home care is most often provided by visiting nurses, therapists, and home health aides. Some LTCI policies consider care received in a retirement home or an assisted living facility to be home care.

Adult day care
Adult day care centers provide daily supervision and limited health care in a group setting for elderly and disabled people who live at home. Often, these centers are needed by those who live with relatives who cannot care for them during the day. Adult day care typically provides social interactions, therapeutic activities, preventive health services, and nutritious meals.

Hospice care
A hospice provides comfort and care for terminally ill patients and their families, either in a special facility or sometimes at home.

Respite care
Respite facilities provide temporary care for an elderly or disabled person. They are designed to provide some time off for the primary caregiver (typically a relative). Respite care can be offered in a nursing home or other facility, or at home through the services of a home health aide.

How much does long-term care cost?
As you can see, there are many variables that go into determining the cost of long-term care, including the level of care needed and the type of facility in which the care is provided. But no matter how you look at it, long-term care is expensive.

There are some generally accepted cost estimates for the most common types of care. As a national average, one year in a nursing home is estimated to cost more than $45,000. This figure varies from one area to another, and in some regions the cost is more than double this amount. Home care is less expensive, but it is still a significant expense. Having a home aide come to your house three times a week to help with dressing, bathing, preparing meals, and the like (2-3 hours per visit) will cost an average of $1,000 per month or $12,000 per year. If you need additional help (physical therapy, respiratory therapy, etc.), the cost can be much greater.

Because the potential expense is so great, advance planning is critical. If you don't have measures in place to pay for long-term care and you lose the ability to take care of yourself, your assets may have to be liquidated to cover the cost of your care. Long-term care insurance is one of several options in addressing this issue.