How to decide if nursing home insurance is right for you
Who Needs Nursing Home Insurance?
by Debra L. Karplus, MS, OTR/L
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Grandma fractured a hip. She spent three days in the hospital and was then discharged to a nearby nursing home for an expected short stay to receive rehabilitation and physical and occupational therapy, so that she could gain strength and return home. It's a good thing the family had encouraged grandma to purchase long-term care insurance a few years prior when she was reasonably healthy. Grandpa suffered a debilitating stroke, leaving him non-verbal and non-ambulatory with impaired judgment and unable to perform his daily care. His nursing home stay is expected to be much longer. He, too, is fortunate enough to own a long-term care policy.
Like a hospital and other health care services, a nursing home is a business that incurs huge expenses to manage it, including overhead, equipment, salaries, utilities, repairs, maintenance, and medical supplies. If you've ever worked in a nursing home, you're already aware of many of the procedures that nursing homes must do to comply with state and federal public health codes that help keep nursing home residents safe. These costs must be passed along to the consumer, thus making a day's stay at a nursing home expensive. Expect to spend several hundred dollars for each day spent in a nursing home. And remember that most people stay for several days, months, or years. At that rate, a nursing home stay can transform a wealthy person into a pauper in short time.
Who needs nursing home insurance?
In the old days, perhaps 30 years ago, sick or injured people stayed in the hospital much longer than today, until they actually recovered, and then returned to their own home or to the home of a relative for further care. These days, insurance mandates shorter hospital stays and patients are discharged when not fully recovered. Compound that with the fact that families tend not to live in the same community, as people move away for jobs and other reasons.
So, who will take care of you if you become unable to take care of yourself? Don't scoff at the question or dismiss it as being silly. Consider the 40-year-old who was in a serious bicycle accident leaving him unable to walk or take care of himself. He lives in one state, and his family lives in another. Or maybe he's lucky enough to have parents living in town, but they're not healthy enough to take care of him. So, who will take care of him? A nursing home may be his best option for receiving daily care and therapy.
Though it's obvious that everyone needs to have health and car insurance, the case for or against having long-term care insurance is not as clear cut. You really need to assess your own personal situation to make that decision. But do ask yourself, "If I become injured or ill, who will take care of me?"
How do you buy long-term care insurance?
For the lowest premium, purchase long-term care insurance when you're young and healthy. One nearly 60-year-old woman purchased nursing home insurance at age 50 through a large national insurance company. She passed her physical exam, and pays less than $500 annually for her policy. Had she bought the insurance at later date, she might be paying perhaps $1000. One reason her premium is relatively inexpensive is that she opted for a longer elimination period. That's comparable to a deductible on other types of insurance; it means she'll pay for her own nursing home stay for more days initially, before the insurance begins covering her stay. Logic told her that because she's basically healthy and has some financial resources, this was a smart choice for her. Thankfully, she's not had to use her insurance, but she's pleased that it allows for a cost-of-living increase that she can add to and also covers at-home care as a nursing home alternative. She's also happy at tax-time that she can itemize the long-term care premium each year as a medical expense on her Schedule A when she prepares her Federal 1040 form.
You definitely want to shop around when considering the purchase of long-term care insurance. Ask friends and family for input. Talk to the insurance agent who handles your home and auto insurance and get recommendations. Search online and obtain quotes. If you're a member of an organization for seniors, inquire about long-term health insurance.
Determining if you need nursing home insurance or long-term care insurance is not an obvious decision. How healthy you, your siblings and your parents are is a helpful guideline as to the probability that you might need long-term care. Do your research first and don't be in a hurry to sign up for a plan. In the end, you'll be glad you were deliberate in making an intelligent decision.
Debra is an occupational therapist, accountant, teacher and freelance writer. She is a writer for Advance for Occupational Therapy Practitioners. She also writes for Grand Magazine, has some items (fiction and non fiction) selling on Amazon.com (kindle), has written several travel articles for the Champaign-Urbana News-Gazette and several articles for freelancewriting.com and volunteers as a money mentor for the University of Illinois Cooperative Extension money mentoring program. Learn more about her at DebraKarplus.blogspot.com.
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