Long Term Health Insurance….is it Worth the Investment?

What is Long Term Health Insurance?

Long term health insurance covers the costs of assisted living and nursing home care which may not be covered under other health insurance plans. Statistics show that roughly 70% of people over age 65 will need some type of long term care. Long term care may also include in-home care such as a nurse who comes to your home to provide physical therapy, administer medicine, or assist with daily hygiene. Long term care can be very expensive for people who do not have long term health insurance.

There are options for long term health insurance from private health insurance companies as part of your regular health insurance plans. There are also separate long term health insurance plans which are not offered by the same company as your regular health insurance carrier. You may also be able to add long term health insurance to your Medicare plan.

There is a real debate though about the cost-benefit analysis of long term health insurance. There are many people who believe long term health insurance companies use scare tactics to sell long term care insurance resulting in people buying more insurance than they may need. Like all insurance, long term health insurance is a gamble in that you don’t know if you will ever need it, but if you do, you will be grateful you have it.

Argument against Long Term Health Insurance

People who oppose long term health insurance point out that most people do not need long term care because most people either get better or die.  They claim that it is rare for someone to need extended care. They also note the 90 day rule which requires the individual to cover the first 90 days in a nursing home facility before the insurance kicks in. They argue that many people won’t need more than 90 days of care in a nursing home. Opponents of long term health insurance also believe placing money in savings is a better use of the money than paying premiums because loved ones will benefit if the money is not needed for health care.

Argument for Long Term Health Insurance

Advocates for long term health insurance claim that even if the need is rare, it can be extremely expensive and can drain a family’s financial resources. Simply put, like all forms of insurance, long term health insurance can provide a sense of security against the possibility of exhausting a family’s assets for long term care.

Hybrid Life and Long Term Care Insurance

In response to the real concern individuals had in investing in long term health insurance—something they hope to never need, some life insurance companies started offering long term health riders which are attached to an individual’s life insurance policy. Buyers believed this was a good solution because if they didn’t need the long term care, their beneficiaries would benefit from the life insurance and if they needed the care, they were covered. There are more limitations on the amount of care covered under these hybrid life/long term care policies and premiums are often more expensive. A hybrid policy may be best for you but finding the right policy can be difficult.

Every individual’s health and financial circumstances should be considered before deciding whether long term health insurance is the right way to plan for the future. Consulting with an experienced Elder Law Attorney can help you decide what is right for you.

SIDE BAR

Medicare is available to individuals over age 65. It can be a more cost effective form of health insurance than private insurance because the government subsidizes the costs of insurance offered through Medicare. Everyone over age 65 qualifies for some form of Medicare but some people are eligible for more lost cost or free coverage depending on their income levels. There are four different types of Medicare from Part A to Part D and each offers more coverage. The cost of adding more coverage may depend on an individual’s assets and income.

The different parts of Medicare help cover specific services:

  • Medicare Part A (Hospital Insurance)
  • Medicare Part B (Medical Insurance)
  • Medicare Part C (also known as Medicare Advantage) –offers health plan options run by Medicare-approved private insurance companies.
  • Medicare Part D (Medicare Prescription Drug Coverage)

How We Can Help

An experienced attorney can answer all your questions and provide you with the knowledge to make educated decisions considering your individual circumstances.  Call Bailey Law Firm at 832.510.2900 to schedule a complimentary consultation or contact us immediately via our online form.

NOTE:  You can rest assured that Bailey Law Firm treats all Client information with Confidentiality and in accordance with HIPAA Regulations.

 

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