What is LTC Insurance: What’s Covered and What’s Not

Americans are living longer than ever. A combination of healthier lifestyles and medical breakthroughs have made what used to be a rare milestone the norm.

What is LTC Insurance and What’s Covered

However, this also opens the door to an increased need for planning. After all, an individual who lives a longer life will need to account for both care and financial security down the line. This is where long-term care insurance becomes a vital piece of the puzzle.

Americans flocking to LTC insurance

If you’ve begun to explore your options regarding long-term care insurance, you’re far from the only one. Data compiled by the American Association for Long-Term Care Insurance (AALTCI) shows that 8.1 million Americans are protected under this type of policy.

Using 2012 as an average year, the AALTCI states that 322,000 new Americans obtained long-term care insurance while $6.6 billion in claims was paid out. Meanwhile, more than 264,000 people received long-term care benefits during this period.

If the numbers make one thing clear, it’s that more individuals are taking advantage of this valuable insurance tool. The question is: Are you?

Understanding the benefits

Before you sign up for any old policy, it’s important to fully understand what long-term care insurance is, and more importantly, what it isn’t.

Although it’s often associated with medical care, long-term care insurance is typically about meeting more personal needs. It can help you pay for assistance with day-to-day tasks such as:

  • Bathing
  • Dressing
  • Toileting
  • Eating

As we age, meeting these and other responsibilities can become much more difficult. Therefore, long-term care insurance can be used to finance help for these tasks, in addition to things like housework, managing money, taking medication, shopping, caring for pets and more.

This type of care can be provided by nurses, home health aides or long-term care facilities. In this way, you can decide whether to receive this care in your own home or at a dedicated location. Just remember that this care is focused on custodial aspects; long-term care insurance is not about providing care for people with ailments beyond the fragility of aging, although this care can also be used for individuals suffering from dementia.

However, despite long-term care insurance not being a medical product, many seniors make the mistake of assuming Medicare will cover their long-term care needs. Unfortunately, this is not the case.

Making up the difference
Under certain circumstances, Medicare may be used to help pay for certain long-term care services. However, these must be medically necessary services, such as doctor visits, drugs and hospital stays. Additionally, if you require short-term care for conditions that are forecast to improve, such as physical therapy following a stroke, Medicare may be used.

When it comes to daily needs, however, Medicare will not provide the coverage long-term care insurance does.

Additionally, Medicare will only help pay for a short stay in a skilled nursing facility or for home health care if you:

  • Have had a recent hospital stay of at least three days
  • Are admitted to a Medicare-certified nursing facility within 30 days of your hospital stay
  • You require skilled care

Only after meeting all of this criteria will Medicare pay for some of the costs, and only for up to 100 days.

The important thing to remember is that even if you have loved ones you can count on to assist you as you age, they may not have the time, energy or skills necessary to provide you with the care you need.

Long-term care insurance prevents seniors from burdening family members or being forced to pay large fees out of pocket. With Americans living longer lives, this coverage can be the safety net you need to ensure you receive the right help as you grow older.

Pete Blasi