Key Issues for Long-Term Health Care
As the baby boomer generation enters its senior years, long-term health care becomes an issue of increasing concern. Whether it be nursing home care or in-home care, the costs will be high. There are key issues to keep in mind when deciding ensure yourself against this future need.
Identification
No other time in life does health care take such a primary role as it does throughout one's senior years. Today's nursing home costs run anywhere between $30,000 and $100,000, depending on the area you're in. Long-term care insurance is an option to consider when planning for these future costs. Unlike Medicare and Medicaid coverage, long-term coverage is sold through independent companies. Benefits can be set up to pay a percentage of overall costs, or a pre-specified amount for each service. There are no standardized policies, so prices can vary.
Significance
The key issue to consider when deciding on long-term health-care insurance is whether or not it's affordable. With this type of insurance coverage, your premium rates will increase as you get older, even with fairly hefty premium payments during the pre-retirement years. Calculating the overall cost of payments, and comparing that with an estimate of the overall costs of long-term care, may provide a clearer picture of where you stand. Here's the bottom line: if you can't afford the premiums now, you won't be able to afford them ten, fifteen or twenty years from now.
Function
Long-term health-care policies are typically sold along with life insurance policies, so benefit distributions can vary. Whole life insurance policies accumulate cash values over time. Many use this cash value to cover burial expenses, and to leave some money for their loved ones. When it comes time to use your long-term care benefits, a portion of this cost may be deducted from the cash value accumulated on your life insurance policy. What this means is, there may be not be any cash value left if health-care needs are costly. Purchasing a long-term policy that's separate from life insurance will avoid the risk of depleting one policy to cover another.
Types
An alternative coverage option for long-term care is offered through Medicare supplement plans. With these plans, premium payments don't start until after you turn 65 years old. The drawback is most of the benefits are meant for in-home care. There are ten different policy types to choose from, some of which include nursing home care, though these are the most expensive. Supplement plans are also sold through independent companies; however they're made to work in conjunction with available Medicare coverages. These are standardized policies, which makes it easier to compare prices between different companies.
Considerations
The rising cost of premium payments for long-term care results in a large number of people dropping their policies right when they need them the most. As the number of senior citizens continues to increase, so do their expected lifespans. It's become increasingly apparent that present-day health-care models do not address health-care needs for the elderly. Determining what role government should take in resolving these issues are the key challenges faced by policymakers. As government's role ends where health care leaves off and long-term care begins, deciding who should pay for these services, and who should deliver them are the biggest questions that need to be answered.
Tags: long-term care, life insurance, cash value, nursing home, premium payments