Long Term Care Insurance: Paying For Long-Term Care
This type of private insurance policy can help pay for many types of long-term care, including both skilled and non-skilled care.
Long-term care insurance coverage can vary widely. Some policies may cover only nursing home care. Others may include coverage for a whole range of services like care in an adult day care center, assisted living, medical equipment, and formal and informal home care.
Long-term care insurance premiums vary, depending on your age and health status when you buy the long-term care insurance policy and how much coverage you want. Additionally, you must be in generally good health to pass underwriting when purchasing a policy. For this reason, it may be better to buy long-term care insurance at a younger age when premiums are lower. If this is done, a periodic review is advised to make sure your policy covers your current and future long-term care needs. But you can buy long-term care insurance at any age. Talk about this with a family member, insurance agent, or financial advisor to learn what is best for you.
The cost of care, especially in nursing homes and assisted living facilities, varies from state to state. Make sure that the long-term care insurance policy you buy will cover the costs of care where you plan to use it.
Most long-term care insurance policies offer certain tax benefits. These policies are called Tax-Qualified, or TQ, policies. Depending on your age, you can include some or all of the premium for a TQ policy as a medical deduction on your Federal income tax form if you itemize your deductions. Also, when you receive payments from a Tax-Qualified policy, you generally dont have to pay Federal tax on them.
Private insurance companies sell long-term care insurance policies. You can buy them from an insurance agent or through the mail. Or, you may be able to buy a group policy through an employer or through membership in an association. Insurance companies may let you keep coverage after your employment ends or your employer cancels the group plan. You may be able to continue your coverage or convert it to another long-term care insurance policy.
The Federal Long-Term Care Insurance Program (FLTCIP) offers Federal and U.S. Postal Service employees, and annuitants, members and retired members of the Uniformed Services, their spouses and other qualified relatives the opportunity to buy long-term care insurance at a group rate. Under this program, insurers that are selected and approved by the Government will make long-term care insurance policies available to those individuals who qualify.
The Partnership for Long-Term Care, a partnership between Medicaid and long-term care insurers, is currently available in four states (listed below) to provide an alternative to spending down or transferring assets. The four Partnership States have focused on creating affordable products that encourage people to self-insure, enable purchasers to provide better protection against impoverishment, and reduce long-term care costs for the Medicaid program.
Buying a long-term care insurance policy is an important decision. Make sure that you buy from a reliable company. Insurance companies must be licensed by your State to sell long-term care insurance.
Be certain that you are dealing with a company that you know. If you decide to buy long-term care insurance, be sure that the company and the agent, if one is involved, is licensed in your State. If you arent sure, call your State Insurance Department.
If you are considering buying long-term care insurance policy, call the insurance company and ask for a sample policy or Outline of Coverage that shows benefits and costs. Go over the information carefully. Compare the costs and benefits of policies from different insurance companies. Find out if any of the policies are Tax-Qualified if this is important to you. Be sure to talk with the insurance agent about anything you dont understand.
For more information on long-term care insurance, contact the National Association of Insurance Commissioners (NAIC). NAIC represents state health insurance regulators and has a publication called "A Shoppers Guide to Long-Term Care Insurance." You can also get a copy of this publication from your State Insurance Department or the National Association of Insurance Commissioners, 2301 McGee Street, Suite 800, Kansas City, MO 64108-3600.
If you have questions about where to buy long-term care insurance in your area, call your State Insurance Department.
State Health Insurance Assistance Programs (SHIPs) are state programs that get money from the Federal Government to give free health insurance counseling and assistance to people with Medicare. SHIPs have counselors who might be able to answer your questions about how to pay for long-term care, the coverage you may already have, or whether there are any government programs that may help with your health care expenses.
Listed below are some opportunities and requirements/limits about buying a long-term care insurance policy: