Do You Need Long-Term Care Insurance?
Our population is aging, and life spans show every promise of continuing to climb. Still, health-care innovations won't advance enough to erase the illnesses and complications that come with old age. And that means that many of us could be looking at extended, out-of-hospital care - such as in a nursing home or through home-health assistance - sometime in our lives.
Considering that the price of the average nursing-home stay will spiral to $80,000 annually by 2010, it's smart to consider whether you'll have the money to pay for this care. Buying a long-term care policy is one way to help assure that this care is accessible. But before you invest in a policy, consider the factors that can help land you the best coverage - and price - for your needs.
How Much Does It Really Co$t?
Compared with several years ago, long-term care policies provide more comprehensive coverage and are less likely to carry steep premium increases over time. Still, policies run anywhere from $900 to more than $6,000 annually.
The older you are, the more you'll pay for this coverage. Insure.com notes that a policy offering a $100-a-day nursing home benefit ($50 daily for home care), a lifetime benefit period, a 20- to 30-day deductible, plus inflation protection would cost about $1,450 annually for a 55-year-old - but more than $6,350 if you are 75.
What Will You Really Need?
Before you rush out to buy a policy before your next birthday, consider why you may need it, and how much you can get away with buying. Between 65 and 69 there's only a 10% chance that you'll need this insurance, but this probability spikes to 40% by the time you reach 85.
And Medicare won't pay much. After three consecutive days in the hospital, Medicare pays (here we go - follow close!) everything for the first 20 days at the nursing home, and costs over $96 per day for the next 80 days. After 100 days, you're on your own. Don't forget that home health care may be a major cost in a long-term illness - and Medicare does pay these costs, along with 80% of any equipment you need.
Some Medigap policies (which you can buy separately to supplement Medicare) will also pay for various levels of nursing-home care, though overall these policies aren't known to give you a better deal than private long-term care insurance. Still, you never know, so find a private policy you like and compare it with a similar Medigap plan in your state. To compare Medigap policies, head for http://www.medicare.gov.
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