Believing that individual or group health insurance would pay for LTC expense, many people put off the purchase of LTC insurance.  Unfortunately, when they needed LTC coverage, they found they were wrong. Those who thought that the government would come to their aid found that there was little help there, either. The government has sent a clear message that it cannot afford to provide long-term care for everyone.

Let’s take a look the options you might have: (click to view)

Option 1:  Let Your Family Care For You
Option 2:  Other Insurance
Option 3:  Medicare and Medicare Supplements
Option 4:  Medicaid
Option 5:  Pay For It Yourself (Self-Insure)
Option 6:  Transfer the Risk

1) Let Your Family Care For You

When you first need long-term care, you’ll probably want to remain at home and let your spouse, friends and family take care of you. For many, the thought of receiving home care from strangers is difficult….and having to enter an assisted living facility or nursing home is often out of the question. Yet, without insurance, the burden on your family can become overwhelming and the impact on your financial security can be jeopardized.

There are policies on the market today that provide monthly cash benefits when care is provided by spouse, friends and family, These policies let you spend the money as you wish – with no strings attached. The money can be used to help cover travel expenses, lost income, out-of-pocket costs, or for anything else. Look for a policy that pays cash benefits with no bills to submit and no elimination period. Look for a policy that will also pay benefits for basic and professional home care services, as well as for the cost of care in an assisted living facility or nursing home.

2) Other Insurance 

You may have individual health insurance or, if you work, group health insurance. These policies are designed to cover your medical and surgical expense: they don’t pay for long-term care.

3) Medicare and Medicare Supplements 

Many people think that Medicare will pay for their nursing home care.  But Medicare pays very little for nursing home expense because most nursing home care is intermediate or custodial in nature.

Intermediate Care refers to a level of nursing services performed intermittently, rather than around the clock, by professional medical personnel, usually a registered or licensed practical nurse or other medical practitioners such as licensed therapists.

Custodial care helps in meeting daily living activities like bathing, dressing, feeding, and is not covered by Medicare.  You may qualify for some limited skilled nursing care benefits for care in a nursing facility after being in the hospital, and perhaps some additional skilled nursing care benefits for care at home.

Medicare Supplements won't pay for intermediate or custodial care, either.

4) Medicaid

Medicaid was designed to be a safety net for the poor. While it does pay for some types of long-term care, it is for people with little income and few, if any, assets. For this reason it can be difficult for most Americans to qualify to receive Medicaid benefits.

5) Pay For It Yourself (Self-Insure) 

You may have resources you could use. But would they be enough? If you do use them - dollars that are so vital to your income and security - it could be extremely difficult to replace them. And once you have spent them, those dollars will not be available for your later years.

6) Transfer the Risk 

We believe that for most people the sensible solution would be to transfer the risk to an insurance company. That way you and the insurance company would share the risk. And that’s a reasonable solution because it’s much easier to pay a few hundred dollars each year in premiums for a good LTC policy than pay huge sums of money out over what could be a long period of time.