Long Term Care

Long-term care is not covered by Medicare , but may be covered by Medicaid if eligible. Policies often include "pooled benefits", which means that you are provided with a total dollar amount that may be used for different types of services.

• Care in nursing homes and home care services such as nursing care, physical therapy, and home health aides.
• Assisted living, adult daycare, and alternate care.
• Alzheimer's and other organic cognitive disabilities usually covered.

What it does not cover:

• Preexisting conditions (insurance companies may exclude coverage of preexisting conditions for six months)
• Some mental and nervous disorders, alcoholism, and drug abuse

Usually, there is a daily, weekly, or monthly limit to your covered expenses. Daily benefit amounts generally range from $50 to more than $300 per day for nursing home coverage. You will have to pay for any costs exceeding the daily benefit amount that you purchase.

• Inflation adjustment- initial benefit amount will increase automatically each year at a specified rate; can add 40 percent to over 100 percent to the premium
• Age- the older you are, the more expensive the premium; however, premiums remain the same each year so the younger you are when you buy the policy, the lower your annual premium will be
• Benefits- size of daily benefit and length of time for which medical insurance benefits will be paid
• Elimination or deductible periods- number of days in residence at a nursing home or number of home care visits you must receive before policy benefits begin; range from zero to 100 days, the longer the period the lower the premium

For example, In 1999, a standard long-term care policy including $100 per day benefit for 4 years would cost $409 for a 50 year-old, $1,002 for a 65 year-old, and $4,166 for a 79 year old. When adjusted for inflation, this same policy would be $881 for a 50 year-old, $1,802 for a 65 year-old, and $5,895 for a 79 year old.

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