Who Pays for Long Term Care Insurance?
The answer to that question may be – you. Long term care insurance was created 25 years ago to provide coverage for those that needed this type of care. (See our article on the History of Long Term Care Insurance). While insurance policies were sold as early as the late 1970’s, many policyholders did not start “cashing in” on them until recently.
Many insurance companies haven’t lived up to their part of the contract and have been denying benefits to those who now need care. Congressional committees have been formed recently to inquire about insurers’ tactics concerning long term care marketing and claims practices and some have speculated that state insurance departments are ill equipped to investigate the problem and that the federal government may in fact take over.
Medicare, Medicaid and other government programs
Regardless of what happens with long term care insurance, the fact remains that without it, costs for care must be paid for out of pocket unless Medicare or Medicaid are available. Medicare is a federally funded program that provides health insurance to those who are age 65 and over. Medicaid is a state and federally funded program that provides health insurance to the poor. Unfortunately, both Medicare and Medicaid don’t cover anywhere near the costs associated with long term care and may have conditions attached for hospital stays before benefits kick in and/or time limits on the length of stay.
Certain states have created long term care partnerships whereby state governments join forces with insurers to provide long term care to state residents without them having to liquidate their assets to participate. Unfortunately, not many states currently have programs, but experts say that may soon be changing due to a greater demand. In addition, the federal government has their own program (Federal Long Term Care Insurance Program – FLTCIP) for long term care insurance that is available to current and retired federal employees and their families.
Regardless of a program or insurance, it’s important to note that area agencies also provide legal help, counseling, caregiver support groups and many other benefits. Local agencies can provide additional information on programs, many of them offered free of charge, to those in need. Other online resources include:
- www.medicare.gov/ (provides information on both Medicare and Medicaid)
- www.opm.gov/insure/ltc (provides information on FLTCIP)
- www.aarp.org/research/longtermcare/insurance/fs124_ltc_06.html (information on state partnership programs from AARP)
- www.ahca.org/ (American Health Care Association – for long term care)