The Future Of Long Term Care

Over the last few years, health care reform has been a hot topic on both a national and state level.  Most Americans have some form of health insurance, and most of us also have opinions on how the health insurance system should be improved.  For those who don’t have health insurance, cost – as opposed to lack of interest – is often the barrier.  Most families are faced with relatively regular need for health care, and thus the reminder of the importance of health insurance is ever-present.

When it comes to long term care insurance however, there is far less understanding about the need for coverage, and far fewer Americans actually have long term care insurance in place.  There tends to be widespread misunderstanding about the role that Medicare and Medicaid can fill in terms of paying for long term care (Medicare pays for health care, not long term care.  Medicaid will cover long term care for people who have exhausted nearly all of their financial assets, but the government has made it increasingly difficult to cheat this system by passing off assets to family members, and it’s important to remember that people relying on Medicaid for long term care are limited in terms of the options Medicaid covers for care facilities and providers).

Although most Americans are aware that they may someday need long term care, there is a general lack of understanding about how much it might cost, and how to best go about preparing financially.

The health care reform law that was enacted last year did include a small subsection devoted to long term care:  The CLASS (Community Living Assistance Services and Supports) Act will provide at least $50 a day for long term care services to people who have paid into the system for at least five years prior to filing a claim.  Although $50 a day is a fraction of the amount required to keep a person in a private nursing home, it would go a long way towards helping to pay for some in-home care and other less expensive long term care needs.

My guess is that over the next decade or so, we’re going to see discussions about long term care that will look similar to what we’ve seen in the last couple years regarding health insurance.  The rate hikes we saw last year in the long term care insurance industry were a sign that long term care is becoming more expensive than ever, and as the population ages, there will be a steadily increasing demand for long term care services.  Other nations are starting to address the subject in their legislative bodies, and although the US tends to prefer private market solutions, it remains to be seen whether government programs like CLASS will become more widespread and robust as time goes by.

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