In the 21st century, healthcare has become a significant financial consideration for people and their loved ones, especially if they require long-term care for chronic conditions related to old age. In the past, citizens could rely on Medicare and Medicaid for these costs, if they found themselves in difficult financial times.
However, in recent times both state and federal governments have begun to signal to citizens that there will be limits to the coverage provided by Medicaid and Medicare. No longer can patients rely on these public funds to cover all of their costs. Moreover, being placed in a situation without appropriate insurance coverage for medical costs can precipitate severe financial challenges, including bankruptcy in some cases. To help fill the gap left by Medicaid and Medicare, insurance providers are boosting their offerings related to long-term care insurance (LTCi) policies.
LTCi policies provide you with coverage for any qualified long-term healthcare costs. Policies such as New York Life’s long-term care insurance product reimburses policyholders for costs. Applicants have the agency to choose their long-term care benefit coverage amount upon purchasing the policy, whereby policyholders are eligible for reimbursement. Though there are limits and conditions to such policies, they do offer consumers a powerful tool in finding ways to cover anticipated long-term healthcare costs.
Ultimately, whether you or someone dear to you is considering a LTC policy, the benefits of such an investment can be immeasurable as healthcare costs continue to rise across the board. Discover below the benefits of such policies and how they may protect you and those close to you both in terms of protecting your financial and physical health.
Although there is not a fixed age that is best for buying a LTCi policy, anyone from age eighteen to seventy-nine is eligible for coverage in most states. In fact, as soon as you can afford the premiums for yourself or someone close to you, it is recommended that you invest in a policy, as costs incurred without insurance can be financially ruinous for some. Understand that the cost of plans generally are higher the older the person is requiring coverage. Thus, it is advisable to invest in a plan when you are of a less advanced age, in better health, and therefor more likely to be approved.
How Much Does Long Term Care Insurance Cost
Qualifying for Long Term Care Insurance Coverage
LTCi plans can require a significant investment financially, and costs vary distinctly by state. Yet, as discussed above, the younger and healthier you are, the more likely your will be able to secure a plan that is more affordable and comprehensive. Moreover, the cost of the policy often becomes insignificant when compared to the cost of out-of-pocket long-term care. For example, some estimates place expenses related to 12 months in an assisted living care facility at approximately $40,000.
The majority of consumers who apply for LTCi do receive coverage, though pre-existing conditions may affect your premium rates and insurability. For example, mental status may precipitate higher costs for premiums. Consult with an insurance agent to determine your eligibility and potential costs as well as online resources for estimates. Moreover, attempt to negotiate with various providers playing one off the other to secure the most favorable terms for your policy.
Underwriting Procedures for Long Term Care INsurance
In contrast to other insurance products related to health, the LTCi policy does not mandate the collection of recent blood or urine samples. Some providers, based on your employment status or age, may mandate reviewing your latest medical files as well as asking you to complete a telephone screening or in-person interview. Consider consulting with an insurance agent to clear up any screening or interview questions, should you have any.
Determining Your Long Term Care Insurance Rates
Long Term Care Insurance Tax Advantages
A bevy of factors go in to determining your premium price. From your age, the extent of your coverage and the length of the waiting period to the inflation choice you select and any additional features, your premium price essentially operates on a sliding scale. Some consumers elect to designate a segment of their current assets to a potential long-term healthcare need, while insuring a smaller segment to remaining long-term care risks, which precipitates lower premium costs. At the same time, others may elect to purchase a larger benefit pool policies.
Federal and state tax laws provide benefits and incentives for businesses and individuals to invest in LTCi policies with the objective reducing the general reliance on Medicaid and Medicare as the dominant pool for underwriting long-term care services. Many standard LTCI policies are considered “qualified” policies, whereby they have the capacity to receive tax incentives when appropriate. Individual and enterprise policy holders of LTCi plans may be eligible for federal tax deductions who itemize their medical expenses. Furthermore, some states even offer state-level tax incentives. (Always check with your CPA or tax advisor first, as information is general in scope)
The Government and Free Long Term Care Insurance Policies
Many consumers mistakenly believe the federal or local government are required to cover all long-term care needs. Though the government does cover some long-term care plans, it is imprudent to anticipate that they government will cover the complete costs of long-term care. The next two sections will explain the benefits and limits of federal programs like Medicaid and Medicare.