What is the cost of long term care?
According to the National Clearinghouse through the United States Department of Health and Human Services, long term care can be costly. In 2009, the average private-pay cost of care per year in a nursing home was about $79,900 for a private room and $72,200 for a shared room. The average private pay cost for a home health aide to provide care at home was $21 per hour, or $19 per hour for homemaker services. Assisted living rates also averaged $37,500 per year in 2009. Rates vary, depending on region, size of the accommodations, services needed, quality of care and amenities. For more region-specific information, visit www.longtermcare.gov.
How does long term care insurance differ from disability insurance?
Although long term care insurance evolved from income disability insurance, disability insurance does not protect a policyholder in the same way. Disability insurance only replaces salary at the time of the injury, and does not pay for the care. The policyholder will then be responsible to pay out-of-pocket expenses for any ongoing long term care due to his/her accident or injury. In addition, Medicare should not be considered a resource for handling any substantial long term care expenses. This program reimburses the insured for a maximum of 100 days, with the average repayment of expenses being a mere 28 days. Medicare will not be sufficient, as long term care can be expensive.
What are the coverage options?
A long term care insurance policy covers any or all of the following types of services:
- Nursing home coverage
- Assisted living facility coverage
- Adult day care center coverage
- Home health care coverage
- Personal care coverage
Most policies pay a daily maximum benefit and a lifetime maximum benefit. Actual benefits are chosen at the time the policy is purchased. The daily maximum benefit for most long term care insurance policies is usually less than the cost of one average day of long term care service.
Who should consider purchasing long term care insurance?
According to the Health Insurance Association of America, the average age at which people purchase long term care insurance is 62. However, purchasing a policy at a younger age typically means policy premiums are much more affordable. While you may pay for a longer period of time, purchasing a policy around age 50 allows you to enjoy the peace of mind in knowing that you are covered. This often evens out the cost of coverage over the life of the policy, as compared to a policy taken at the age of 65 or older.
Paula Symons is an account executive for JRG Advisors, the management company for ChamberChoice. Reach her at (412) 456-7252 or [email protected].