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Long-Term Care Insurance

What is Long-Term Care?

Long-term care is a variety of services that includes medical and non-medical care to people who have a chronic illness or disability. Long-term care helps meet health or personal needs. Most long term care is to assist people with support services such as activities of daily living or in nursing homes. It is important to remember that you can need long-term care at any age. You may never need long-term care.

Provided by: A Shopper's Guide to Long-Term Care Insurance ©2013 National Association of Insurance Commissioners Long-term care is a type of personal care you may need if you are unable to care for yourself because of a physical illness, a disability, or a cognitive impairment, such as Alzheimer's disease.

Long-term care is different from traditional medical care. Traditional medical care tries to treat or cure illnesses. Long-term care usually won’t improve your medical condition, but I will help you maintain your lifestyle. It helps with routine daily activities, such as eating, getting around, and bathing. It can also help if you need supervision, protection, or reminders to take medicines or perform other activities.

You can get long-term care services at your own home or in a hospice, adult day care center, nursing home, or assisted living facility.

Types of Care

There are two types of long-term care services:

  • Skilled care is for conditions that require a medical professional, such as a nurse or a therapist. This type of care is usually provided in a nursing home or other care center.
  • Personal care (sometimes called custodial care) helps you carry out normal daily activities, like bathing, eating and moving around. You can get personal care in your home or in a skilled facility.

The Cost of Long-Term Care

Long-term care can be expensive. The cost depends on the amount and type of care you need, where you receive it, and what type of medical professional provides it. On average in Texas, it costs about:

  • $3,000 per month to live in an assisted living center
  • $6000 per month for a private room in a nursing home
  • $40 a day for adult day care
  • $20 a day for a home health aide

A long-term care insurance policy typically pays from $50 to $250 per day for nursing home care. To find out how much coverage you might need, call local nursing homes, home health care agencies, and adult day care centers and ask about their cost for daily care. Keep in mind that costs will likely increase as you get older.

Paying for Long-Term Care

There are several ways to pay for long-term care.  The most common include:

  • Medicaid
  • Medicare
  • long-term care insurance
  • personal cash or savings

Medicaid is a state and federal assistance program that pays most long-term care expenses for eligible people with low incomes.
To qualify for Medicaid, you must meet income and asset guidelines.  Assets are cash and things you own – such as cars and stocks – that you convert into cash.   Many people pay for long-term care with their own money until they become eligible for Medicaid. To learn more about Medicaid eligibility, call your local Area Agency on Aging or Texas Health and Human Services Commission. There’s a list of phone numbers on pages 15-16 of the most recent publication "A Shopper's Guide to Long-Term Care Insurance."  

Medicare may pay some long-term care costs. Medicare is a federal program that pays for health care for people over age 65 and for people under age 65 with disabilities. It covers the cost of some skilled care in nursing homes or possibly in your home. Medicare might also pay for some nonmedical care in your home if you are receiving skilled care.

Who May Need Long-Term Care?

The need for long-term care may begin gradually as you find that you need more and more help with activities of daily living, such as bathing and dressing or independent activities of daily living (IADLs) such as household chores, meal preparation, or managing money. Or you may suddenly need long-term care after a major illness, such as a stroke or a heart attack.  If you do need care, you may need nursing home or home health care for only a short time. Or, you may need these services for many months, years or the rest of your life. At least 70% of people over 65 will need long-term care services and support at some point.

Consider the following factors before buying long-term care insurance:

  • Life expectancy.  The longer you live, the more likely you will need long-term care.  Consider whether your family has a tendency for long life expectancy. 
  • Gender.  Women might need long-term care insurance more than men because they usually live longer. 
  • Your family situation.  If you have a spouse, adult children, or other family members who can care for you at home, you might not need a policy that pays for home health services.  Instead, you might want to consider a policy that pays only for nursing home care. 
  • Family health history.  You may have a greater need for long-term care if chronic or debilitating health conditions run in your family. 

Services Not Covered by Long-Term Care Insurance 

Long-term care insurance policies may exclude coverage for some conditions, either completely or for a limited time. Policies typically exclude:

  • Preexisting Conditions. A preexisting condition is an illness or disability for which you received medical advice or treatment in the six months before you applied for coverage. A long-term care policy may delay coverage of a preexisting condition for up to six months after the policy’s effective date. 
  • Mental and nervous disorders. A long-term care policy can exclude coverage of some mental and nervous disorders, but the policy must cover serious biologically based mental illnesses and brain diseases, such as schizophrenia and major depressive disorders, and Alzheimer’s disease and other age-related disorders.  (However, a company may refuse to sell a policy to someone already suffering from Alzheimer’s.)
  • Care by family members. Most policies won’t pay members of your family to take care of you.  However, some policies will pay to train family members to be caregivers. 

Standard Policy Exclusions

Texas long-term care policies may exclude coverage for conditions resulting from:

  • alcoholism and drug addiction
  • suicide, attempted suicide or self-inflicted injuries
  • participation in a riot, felony, or insurrection
  • war or an act of war, whether declared or undeclared
  • service in the armed forces
  • aviation activities, if you weren’t a fare-paying passenger

Long-term care policies won’t pay for care that is covered under a government program.  The exceptions are Medicaid and expenses that Medicare pays as a secondary payer.