Surprising, but true: most insurance brokers don’t have the facts on Medicare, not when it comes to long-term care insurance. We’d like to fix that. We hope you'll find this information useful as you're educating your clients about their long-term care insurance options.
What constitutes long-term care?
The Medicare Handbook defines long-term care as “non-medical care for people who have a chronic illness or disability.” This type of care is unskilled labor, including basic help with normal activities and everyday self-care:
- Getting in or out of a chair
- Getting dressed
- Using the bathroom
- Bathing, hygiene
- Feeding oneself
Sometimes it’s also called “custodial care.” It takes place in nursing homes or assisted living facilities, in a person’s house, or in their community. Most people over age 65 will end up needing long-term care at some point in their lives.
Why Medicare is NOT long-term care insurance.
Concerning long-term custodial care, Section 9 (pg 127) of the Medicare Handbook clearly states:
“Medicare and most health insurance plans, including Medicare Supplement Insurance (Medigap) policies, don’t pay for this type of care” (source).
An important detail. About 70 percent of people of retirement age are going to need long-term care eventually, which means they’ll need a way to pay for it. Yet this type of care can prove pricey. Averages run $40K to $65K per year for an assisted living facility or nursing home, respectively (source).
As a result, if a retirement-age people spend years believing that their Medicare will provide long-term care coverage when they need it, they may be in for a serious shock. Same for their family members:
“I always thought Medicare covered long-term care but now I am finding out I was totally wrong. My mother has suffered a severe stroke. Her rehab facility is saying Medicare is not paying for her care. I’ve been informed that beginning next week, to receive care from this facility, it will have to be private pay or I will have to take her home” (source).
If, however, members become aware of the facts sooner than later, they may still have time to plan for the kind of care they want. The younger you are when you purchase private long-term care insurance, the lower the premium.
So... what are the options?
Medicare members planning for their long-term needs have several options to explore:
- Purchase private long-term care insurance
- Rely on personal savings
- Draw from personal life insurance policy
- Pay for care through a trust or annuity
- Use Medicaid, Veterans’ Benefits or PACE
The Medicare Handbook (Section 9) provides lots of resources where you can learn more about each of these topics. Make sure to keep inflation in mind as you plan for the future. These cost of care calculators can help you foresee the future cost of assisted living – but be prepared, it’s a shocker!
Make sure your customers understand the difference between Medicare and long-term care insurance. And, visit our long-term care insurance page to download LTCI sales resources or request a long-term care insurance quote.