Long Term Care Insurance Blog

Have you ever thought about who actually pays for long term care? According to the Health Policy Institute, in 2007, a report confirmed that “…more than $200 billion is spent each year on long-term care in the US.”

That’s a lot of money, so it begs the question is, who is paying for this?

Those who are fortunate enough to have family near by can count on family for long term care, and therefore save lots of money. The reality is though, as families live further and further apart, this is becoming more difficult. So…

The top 5 payers of long term care are:

• Medicaid – $101.1 billion
• Medicare – $42.2 billion
• Out-of-pocket – $37.4 billion
• Private Health & Long Term Care Insurance – $14.9 billion
• Other Private – $5.6 billion

These statistics, and a lot more, can be found in Kiplinger’s “The Next Step”, a fantastic workbook on planning for long term care. As mentioned in the workbook, reading these numbers may create an assumption that the government is willing to pay the bill for long term care. Click the image below to read more about why one, the government most likely isn’t going to cover the tab and two, why it’s important to educate yourself now about how to handle the escalating costs of long term care.
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It’s a question we see posted on the internet quite often. We then run through the reasons, statistics and numbers of why yes, you should bother with (or at least consider) long term care insurance. Just recently we received a comment on our blog and thought we would share it with our readers, because it takes a pretty matter-of-fact approach to long term care insurance. You can read the full comment below our post here “Is Long Term Care Insurance Worth It”

Is Long Term Care Insurance Worth It is not a plain and simple question. Part of the replier’s comment mentions it is not required like other insurance. On reflection, in my opinion most insurance is not required or obligatory, with perhaps the exception of auto insurance. Our homeowners insurance is voluntary, yet almost no one would consider not having it, which is equally true of most of the property and casualty insurance business.

Health insurance is not mandated, and those without it generally are not going without it out of choice, but out of necessity of one type or another. Life insurance is another example. It is not mandatory, but people starting with a family understand the value of life insurance. Most people don’t think they will die before their children are grown and on their own. People buy life insurance because of the consequences to their family and loved ones IF something were to happen to them. Statistics reveal that most people don’t use their life insurance, but it brings them peace of mind knowing that their spouse and family will be provided for in the unlikely event something tragic were to happen.

What fewer people consider (or maybe it’s simply a matter of not knowing) are the actual costs incurred when long term care is needed. We’re not going to run through the numbers right now – you can read about costs of long term care here – but it’s funny how, as our commenter mentions, people barely hesitate to pile on other types of insurance (most of which are not required) but really struggle with LTCI. Yes, we often hear about the costs of LTCI, but there are ways around this, as we’ve explain HERE.

Not everyone needs long term care insurance, but there is no harm in learning more about it before jumping to conclusions about the necessity of it.

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