As the senior population grows and health care costs escalate, adult children
are becoming increasingly concerned about caring for their aging parents. Many
families are dealing with the challenges of mental or physical disability or
prolonged illness. For thousands of others, these realities may be just around
the corner.
The challenge for these families is to provide the best possible long-term care
for a parent without causing severe financial hardship for the rest of the
family. In most cases, families must plan ahead without knowing the answers to
key questions: Will a parent need round-the-clock nursing home care or
assistance with daily activities such as bathing and dressing? Will home health
care be enough? Will Medicare pay for it? Does the parent qualify for Medicaid?
What cost will the family incur?
One thing is certain — long-term care is very expensive. Unlike traditional
medical care, which seeks to rehabilitate or correct certain medical ills,
long-term care aims to help people with chronic conditions compensate for
limitations on their ability to function independently. Long-term care involves
a wide variety of services and, generally, older people often need more care
than they anticipate.
Government assistance programs may offer little help. Medicare — the federal
health insurance program for people over the age of 65 — provides very limited
long-term care benefits and can require substantial co-payments. Medicaid — the
public health care program for low-income Americans — has strict financial
eligibility criteria and generally requires beneficiaries to deplete their
savings, or "spend down," before it will pay for services. Other public
services may be available but typically are offered on a sliding-fee scale,
based on ability to pay. There also may be waiting lists.
While long-term care insurance is not for everyone, it is an attractive form of
security for many people. Depending on the policy, long-term care insurance can
cover nursing home stays, home health care and community-based services.
People usually buy long-term care policies from private insurance companies.
However, a growing number of employers are now offering policies to their
employees, employees’ parents and retirees.
Policies vary widely in coverage and cost. Some only cover nursing home care;
others only home care. Shop around and consider the following factors before
buying a policy:
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The age, health, overall retirement objectives and financial resources of the
person who is to be insured;
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The financial stability of the insurance companies you’re considering; and,
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The "triggers" each company requires to start coverage.
Existing health problems, such as Parkinson’s or Alzheimer’s, might prevent some
people from obtaining long-term care insurance due to medical underwriting
standards that insurance companies use to keep their rates affordable. Without
such provisions, most people would not buy coverage until they needed services.