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Long-Term Care Insurance Vs. Medicare

There may come a time in your life when you are not able to live independently any more. This may happen suddenly, perhaps after being hospitalized for an emergency surgery, or it may be a gradual occurrence, where you notice you can no longer manage daily household duties like you used to. Many decisions await you when it comes time to select housing options; one of them is how you will pay for it.

  1. Medicare

    • Medicare isn't going to cover you for an extended nursing home stay. What it does cover is skilled rehabilitation services that you may need after surgery, for example, physical therapy and intravenous injections. Coverage typically lasts for 100 days. You may receive these services at a hospital or a nursing home. Medicare does not cover custodial care, however, such as helping you get in and out of bed, with eating, going to the bathroom or bathing. Even private Medicare supplement insurance, such as Medigap, does not cover long-term care.

    Long-Term Care Insurance

    • You can get a long-term care policy that covers all the assistance you'll need if a chronic illness or disability leaves you unable to care for yourself. Long-term care insurance varies by the policy. When you shop for this type of coverage, find out whether it covers skilled and/or custodial care. Contact your state's insurance department to compare the different policies. Depending on your situation and insurance policy, you can receive long-term care in your own home, an assisted living facility or in a nursing home.

    Long-Term Care Statistics

    • Just like with any type of insurance, you hope you'll never need to use it. Only about 19 percent of Americans older than 65 experience chronic physical impairment, according to America's Health Insurance Plans. Once you reach age 85, you are 55 percent more likely to need long-term care.

    Government Program

    • A government-run program called Community Living Assistance Services and Supports, or CLASS, is a long-term care insurance policy that you can enroll in with your employer. As of 2010, plans are to start the program in 2012 or 2013. You will be able to use CLASS benefits for personal care, home modifications, assistive technology or toward nursing home or assisted living expenses.

    Making a Decision

    • As of 2009, the average cost of a private room in a nursing home was $79,935 a year, according to AARP. If you have a moderate amount of income or savings, long-term care insurance makes sense. But if you have a lot of money or very little money, it probably doesn't. If you have a lot of money, you'll probably be able to pay for your long-term care yourself for several years. If you have little money, Medicaid will pay. If you decide you want to buy long-term care insurance, check whether the policy is inflation-adjusted, what the company's credit rating is and where you can receive services, recommends AARP.

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