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Insurance
Planning 
Long Term Nursing Care
•Long Term Care can be handled in many different ways, one of which is through purchasing insurance in advance.
•This method of solving the long term care need actually transfers the risk of a family member going into a nursing home to an insurance company.
•The company agrees in advance, that for an agreed upon "risk premium" they will pay the cost of the nursing home should the insured person be admitted into a nursing facility, be it a personal care/assisted care facility, or a full-fledged nursing home.
•The companies issue coverage that can pay as much as $8,000 per month or more to provide custodial, semi-skilled, and skilled nursing care to the insured for as long as they live, or as otherwise designed by the insured when purchased in advance.
•This insurance is only available however, when purchased while the insured is in good health with no foreseeable need to enter a nursing home.
What is Long-Term Care?
Long-term care refers to a broad range of supportive medical, personal and social services needed by people who are unable to meet their basic living needs for an extended period of time. This may be caused by accident, illness or frailty. Such conditions include the inability to move about, dress, bathe, eat, use a toilet, medicate and avoid incontinence. Also care may be needed to help the disabled with household cleaning, preparing meals, shopping, paying bills, visiting the doctor, answering the phone and taking medications. Additional long-term care disabilities are due to cognitive impairment from stroke, depression, dementia, Alzheimer's, Parkinson's and so on.
Long-term care requires a healthy person to provide support for the disabled person. This support can be offered at home or in an institution. As a rule, those who are disabled prefer to stay at home and most of the time so-called informal care givers (family and friends) prefer the home as well, but the deciding factor of where to receive help ultimately centers on the nature of the disability. For example, a wife caring for her overweight husband may be unable to help him bathe, dress, use the toilet or even transfer from the bed to a chair. She will either have to hire aides to come to the home or put him in an institution. Another example might be an Alzheimer's patient who has become unmanageable and must receive constant supervision. This may be impossible at home and an Alzheimer's facility may be the only solution.
Facts About Long-term Care
More long-term care is received at home and in community facilities than is received in nursing homes. It has been estimated that one quarter of American households are involved, directly or indirectly, in care giving for a family member. This represents families trying to juggle demands of full-time jobs with demands of care giving for a loved one. But long-term care is not just for the old. Out of the total population receiving it, many are under the age of 65. For those people over 65 there is an almost even chance they will spend an average of 2-3 years in a nursing home. The combined lifetime risk of needing home and community care as well as nursing home care is about 6 out of 10.
People need to concern themselves not only with the longstanding concern of dying too soon, but also with living too long. Medical science is keeping us alive longer and there are fewer early sudden deaths. Fewer deaths mean more prolonged health problems requiring long-term care. In addition the population of those over age 65 is increasing while the younger population is stagnating. This trend will continue to put pressure on aging services including long term care. Yet at the same time, the supply of non-paid caregivers is shrinking. Many of these traditional caregivers are women that are now working. Also, families are having fewer children thus affecting the future supply of care givers. In addition, many family members are unable to help because they don't live close by. These are all factors that reduce the pool of available care givers. And this lack of traditional family care givers is forcing more people to spend out-of-pocket for the services of paid professionals or, so-called formal care.
But that's not all. Care traditionally provided by government agencies is diminishing as well. Medicare spending on home care dropped from $17.5 billion in 1997 to $14.9 billion in 1998 and to $9.7 billion in 1999. A 45% decline in 3 years. It's predicted that an aging population over the next 20 years will cause a huge drain on state Medicaid programs, which are currently the primary source of funding for nursing homes. Finally, Congress is sending a clear message it has no intent to create a new government-sponsored, long-term care entitlement program.
The cost of a nursing home ranges from $60,000 to $80,000 per year. Home and community care can range from $12,000 to $50,000 per year. Statistics show that after paying for 1 year of long term care, up to 70% of elderly Americans may end up impoverished. If there is a healthy spouse in that unfortunate household the standard of living is greatly reduced from the loss of assets.
The Crisis in Long-term CareWe are facing a potential future crisis in long-term care and so far, the government has shown little inclination to provide a long-term care entitlement program for everyone similar to Social Security and Medicare. With increasing pressure from the AARP and the demands of a voting public that is increasingly growing older, the government's attitude may change. Government programs may take one or the other or a combination of 2 approaches. The first might be a national long-term care insurance program funded jointly by the government, employers and insured individuals. The second might be government support of private LTC insurance. But since not all people can qualify for individual long-term care insurance because of poor health, the government might encourage the establishment of employer group plans in a system similar to the private offering of health insurance through employers. There may be other approaches as well, but it is probably a sure bet the government will eventually intervene in solving a pending long-term care crisis.
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