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Question: I am 53 years old. My mother spent several years
in a nursing home and I am wondering if I should purchase
long-term care insurance for myself.
Answer: Like so many questions that force us to evaluate
our risks, there are no definite answers. We know that one
out of every four people will spend a year or more in a
nursing home and that one in 11 will spend five years or
more. Medicare only covers the first 90 days if certain
conditions are met. This means that the cost of a nursing
home will not be covered by basic health insurance or by a
government program for middle and upper income families.
Nursing homes are only one long-term care choice. Other
choices include home care, assisted living and adult day
care. Long-term care needs go beyond an individual; they
impact an entire family. One in three workers take care of
an aging family member. The entire family generally has
physical and emotional needs that require attention.
Individuals and their families must find the resources to
cover these long-term care costs and they can be quite
hefty. Nursing home costs vary widely. It is estimated that
by 2010 the cost of a nursing home in Denver will range from
$73,040 to $90,519 per year.
There are four basic sources to cover long-term care
expenses:
- Self insurance. If you find that you need long-term care,
you plan to pay from your savings and investments. One major
issue is to make sure there are adequate assets to cover
both long-term care expenses and to provide adequate income
for the spouse who does not need this care.
- Medicaid. Jointly funded by federal and state
governments, Medicaid will cover long-term care expenses for
individuals whose income and assets fall below an
established level.
- Single-premium life insurance: Expenses are paid from the
policy’s cash reserve. If the funds are not used, they go to
heirs. Some policies can be written to cover both husband
and wife.
- Long-term care insurance: An insurance policy covers all
or some of the costs of needed care.
Future columns will cover comparing policies, premium costs,
and evaluating agents and companies. For more information, see “Long-Term Care Insurance”
or contact your local
Colorado State University Extension office.
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