Facts about Long Term Care

Because this type of policy is still rather new, you may be unfamiliar with the terminology and provisions of Long Term Care protection. So, here are some brief explanations:

• Did You Know...?

• The Need For Long Term Care

• The Aging Issue

• Who Pays For It Now?

• What About Medicare and Medicaid?

Did You Know...?

• 1 in 2 (50%) of ALL individuals will face the risk of incurring Long Term Care costs themselves.

...and many have no protection against this loss.

• By comparison, only 1 in 1,200 people have the chance of losing a home by fire or accident.

...and everyone has fire insurance.

• The cost of caring for an elderly individual averages $55,000 a year or more.

• The average nursing home stay is 2.5 years.  (HIAA, "Consumer's Guide to LTC," 1996).

• The total cost of Long Term Care can easily surpass $250,000.00!

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The Need For Long Term Care

• Nearly 100 Million Americans have one or more chronic conditions.

Hoffman, C., Rice D.A. & Sun, H.Y. (1996). "Persons With Chronic Conditions: Their Prevalence and Costs". Journal of the American Medical Association; 276 (18): 1473-1479.

• Between 10.3 and 14.7 million Americans age 18 and over are afflicted with adult onset brain disorders.

Family Caregiver Alliance (1996), "Incidence and Prevalence of the Major Causes of Adult-Onset Brain Impairment in the United States and California."

• Average nursing home stay is 2.5 years.

HIAA, "Consumers Guide to Long Term Care,"1996.

• By the year 2020, 12 million older Americans will need long term care.

HIAA "Consumers Guide to Long Term Care,"1996.

• About 60% of the U. S. population will need LTC at some point, but only 1% has coverage.

"The dollars and sense of offering long term care," Janet Gemignani, Business Health, February 1996, p.55.

• 40 percent of people who receive long term care are between the ages of 18 and 64.

Nancy L. Breuer, "Uncle Sam No Longer Has His Hand Out", Workforce, July 1997.

• The average 67-year-old man can expect to spend $56,895 on Long Term Care, according to the American Health Care Association. A 67-year-old woman can expect to spend $124,370.

"Preserving assets in time of need." Marci Bailey, The Boston Globe, May 8, 1997,p.B1.

• 80 percent of all long-term care is now provided outside of nursing homes.

Life Health Financial Services Edition, National Underwriter, Paying for LTC a Big Concern: Survey, May 5, 1997.

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The Aging Issue

• By 2013 the percentage of nations populace ages 65 to 74 will be 7.5% and ages 75 to 84, 7.6%.  .

• 1/2 of Americans who reach the age of 65 will at some point live in a nursing home facility.

"LTC Insurance Market Is Growing Younger," John Wayne, best’s Review, July 1995.

• Those age 65 or more constitute 13% of the U.S. resident population.

Long Term Care For The Elderly: A Chart Book. The Commonwealth Fund, Harriet L. Komisar, Jeanne Lambrew, Judith Feder, December 1996.

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Who Pays For It Now?

• If you don't currently have Long Term Care insurance, how do these costs get paid?  Right now, Medicare, Medicaid, and private insurance combined only cover about half the expenses.

Long Term Care Expenditures by payer on 1994. Long Term Care for the Elderly: A Chart Book. The Commonwealth Fund, Harriet L. Lomisar, Jeanne M. Lambrew, Judith Feder, December 1996.

• "Out of Pocket" expenses - those costs not covered by Medicare, Medicaid, and other insurance - can easily exceed 33% of the total need.  That is money that you must pay for yourself, out of savings, loans, or income.  That does not include the lost work that is often associated with caring for an elderly individual when nursing care is not affordable.

The Commonwealth Fund, Harriet L. Komisar, Jeanne M. Lambrew, Judith Feder, December 1996.  Long Term Care for the Elderly: A Chart Book.

About 76% to 80% of caregiving costs for disabled older adults at home are attributed to unpaid labor by family members.

Harrow, B.S., Tennestedt, S.L. & McKinlay, J.B. (1995). How Costly Is It to Care for Disabled Elders in a Community Setting?’ The Gerontologist, 35(6):803-813.

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What About Medicare and Medicaid?

• Medicare currently pays for only 16% of all long term care.

U.S. Health Care Financing Administration Study.

• State Medicaid programs cover 38%. However, you must spend down to poverty levels to qualify.

Georgetown University Institute for Health and Care Research and Policy, based on Levit et. Al. (1996); data from the Office of National Health Statistics.

• More than half of all nursing home cost are paid by Medicaid, after nursing home residents spend down their own savings to national poverty level guidelines to become eligible.

HIAA, "Consumers Guide to Long Term Care." 1996.

• Medicare pays for only the first 100 days of nursing home care.

Samuel Liang, RFC, LTC to supplement, not substitute for Medicare, Life and health Advisor, February 1997.

• Medicare supplements like Medigap don’t cover nursing home stays.

Samuel Liang, RFC, LTC to supplement, not substitute for Medicare, Life and Health Advisor. February 1997.

• Kennedy-Kassenbaum Law states that transferring an asset with the specific intent to qualify for Medicaid will not only disqualify you, it will now be criminally punishable by a fine, jail time or both.

Samuel Liang, RFC, LTC to supplement, not substitute for Medicare, Life and Health Advisor, February 1997.

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