Before, people viewed LTC insurance as more of a luxury than a necessity. But as time passed by, this perception is slowly changing and more Americans view this as a real need for the future. You can see this change as more plan holders include LTC coverage in their existing insurance policies. Adding long term care insurance is a worthy investment that you can make in the present for your future needs. But the question that remains is, “what are your long term care payment options?”
To answer this question, we have to look the annual earnings of an average American family. The country’s total population would earn an annual income around $85,000 to $100,000 bracket. But out of the total, around 6.2 million are earning below this bracket and are included in households with minimum income.
Whether you are part of the population that earns more or less, income is probably the most important factor to consider when exploring different long term care payment options.
It is expected that by the year 2030, those who would be turning 65 years old would have secured a long term care insurance policy. Yet the sad truth remains that only a handful or around 10 million would have gotten this policy included in their insurance. The rest would have to rely on government fund program for their long term care needs.
Long Term Care Payment Options
Medicare is primarily focused on physical therapy and rehabilitation. If you are considering this option, some of the requirements is that you have to be 65 years old and above or you have developed a debilitating condition that would make you eligible for physical therapy sessions. However, you should keep in mind that coverage for this program is limited to a minimum of 3 days of hospital care for a medically diagnosed condition and 100 days coverage for staying in a nursing home facility.
Medicaid is also another example of an insurance program that is run by both the federal and state governments. Its primary beneficiaries are those who belong to the marginalized group. If Medicaid is an option you are considering for your long term care needs, you would have to rethink this option as it also offers limited coverage.
Long Term Care Insurance
Long term care insurance provides relief to policyholders and their families by paying for nursing homes, assisted living facilities, CCRCs, home care and other long term care services. It is an insurance that is custom-built for each policyholder. Meaning, you can personalize your policy based on your needs and budget, and therefore dismisses the notion that this type of policy is expensive. Buying long term care insurance can protect your assets and your loved ones from the devastating cost of long term care.
Using your savings to pay for your long term care expenses is possible. But, self-insuring might take a toll on your savings considering that the cost of nursing homes and assisted living facilities continue to rise.
Instead of self-insuring, experts encourage people from going down this path, especially for those with limited resources. Opting for this is reasonable if you have a big nest egg that can provide steady cash flow. Consulting a financial advisor can help you pull this off successfully if you really insist on choosing this payment option.
Devising your own personal plan of action on paying for long term care is an important step that you can make now. It’s one way that you can plan for your future needs without having to worry about finding the resources to fund your health care and daily living assistance. It is always best for you to check the available products and services out there in the market that would suit your needs. Currently, some policies offer a reimbursement program that pays the policy holder the costs of coverage or cash out plan. You can either inquire from an insurance company or a licensed agent to get more details on the best long term care insurance that would suit your needs.