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Long-term Care Insurance

Long-term care insurance is a protection plan that pays you a set amount when you can no longer live independently. It can help pay your nursing home costs, your assisted living costs, even your costs when you are disabled and confined to your home. Whenever you can't perform some of the essential activities of daily living - eating, bathing, getting out of bed, going to the bathroom, walking, dressing yourself, etc. - your long-term care insurance will cover the cost of caring for you.

Unlike disability insurance, which pays a pre-determined amount,  long-term care insurance pays the amount required to reimburse you for various expenses associated with caring for you. 

Long-term care insurance premiums are based on three factors:

  • Age

  • Current Health

  • What options you have in the plan

Medicare and Medicaid

Government programs such as Medicare and Medicaid are also available to help cover long-term care expenses, but the coverage is limited and not available to everyone. 

Medicare has two parts - hospital insurance and medical insurance. Hospital insurance helps pay hospital bills and some follow-up care. The taxes you paid while you were working financed this coverage, so it's premium free. The other part of Medicare, medical insurance, helps pay doctors' bills and other services. You will pay a monthly premium for this coverage if you want it.

Medicaid is a medical assistance program that is partially funded by the Federal Government but run by each State. Medicaid pays for basic medical care for people and families with low incomes and resources. People who are blind or disabled, age 65 or older, children, or members of families with dependent children may be eligible.

Medicaid pays for almost half of the country’s long-term care bills. To qualify for a Medicaid program, your monthly income and assets must meet certain limits. Medicaid will cover you in Medicaid-approved nursing homes that offer the level of care you need. Under certain programs, Medicaid will pay for home health care. 

Social Security

The Social Security Administration is responsible for two major programs that provide benefits based on disability: Social Security Disability Insurance (SSDI), which is based on prior work under Social Security, and Supplemental Security Income (SSI). Under SSI, payments are made on the basis of financial need.