Long Term Care Insurance

Long-term care (LTC) insurance provides for a person's care in cases of chronic illness or disability. Policies for LTC provide insurance coverage for times when an individual cannot independently manage the essential activities of daily living (ADLs). These are universally known as feeding, dressing, bathing, toileting, and walking, as well as moving oneself from a bed to a chair (transferring). However, disabilities are not confined to these physical situations; they can be mental as well. The key element is that they limit the individual's ability to perform any of these functions.

In 2003, more than 24 million households in the United States included a caregiver who was 50 years of age or older. About 73% of unpaid caregivers were women—and one-third of them are more than 65 years old. Many caregivers, especially women, balance multiple roles by providing care for both their parents and their children. Caring for a loved one full-time can overwhelm even the most devoted family member.

As a result, more caregivers than ever are turning to outside resources to help with the care of a family member.In 2030, it is anticipated that people aged 65 and over will comprise 20% of the population. The United States Census Bureau is projecting that the population aged 65 and over will be 39.7 million in 2010, 53.7 million in 2020, and 70.3 million in 2030. As of 2003, at least 6.4 million people aged 65 and over require LTC; one in two people over the age of 85 require this kind of care now, and at least half of the population who are over the age of 85 will need help with ADLs.

The purpose of LTC insurance is to provide coverage for a succession of care giving services for the elderly, the chronically ill, the disabled, or the seriously injured. This care may be provided in a skilled nursing facility (SNF); a nursing home; a mental hospital; in a per son's home with a registered nurse (RN), a licensed practical nurse (LPN), or nurse's aide; or even in an assisted living facility (ALF). It is important to note the societal changes responsible for the increased need for professional services to care for our loved ones. Although today's families are smaller and a number of women are working outside the home, the majority of LTC continues to be provided by unpaid, informal caregivers—family members and friends.

Advantages to purchasing LTC insurance

The financial risks of illness and injury are rarely considered when one is healthy and able, but that is also when the greatest choice of products with the best flexibility in cost is available for those considering LTC insurance. Having a LTC insurance policy enables access to quality care and choice of care provider when the need is greatest. Purchasing a policy when a person does not need it gives them the opportunity to investigate the company's financial stability (whether it is solid and how it is rated), operating performance, insurance industry rating, and its claims ratio. Rates should be guaranteed renewable, and coverage shouldn't be canceled because of age or a change in a person's health nor should premiums be increased on a class-wide basis.

There are several government organizations that can be of assistance in the purchase, evaluation, and monitoring of LTC insurance. One is the state health insurance assistance program—SHIP—that can review the policy before the actual purchase. Another excellent organization is the Health Insurance Association of America (HIAA), which protects consumers from the financial risks of injury and illness by providing affordable and flexible services that represent a choice. In the United States, HIAA focuses on managed care, and, specifically, advocates on issues such as disability income and LTC insurance.

The mission of the Health Insurance Association of America is to preserve financial security, freedom of choice, and dignity in LTC insurance. Because of its mission, HIAA seeks to:

• Provide access to quality care and let a person choose where care is obtained.
• Eliminate out-of-pocket costs and avoid reliance on government programs for the poor.
• Ensure quality of life for a patient's caregivers.

Having a LTC insurance policy cuts out-of-pocket costs and keeps the patient from having to rely on government assistance programs. Studies from the United States Department of Health and Human Services estimate that people with LTC insurance save between $60,000 and $75,000 in nursing home costs, more than $100,000 for assisted living, and actually ensure a higher quality of life for their caregiver. By having LTC at home, spouses and other family members are able to continue working or run errands while their loved one is being care for.