Many older adults will need help at home with activities of daily living. To help with in-home care costs, Aeroflow Healthcare provides information on long-term care insurance options to help caregivers identify the best plan for their older adult’s needs.
With almost 10,000 Americans turning 65 each day, the number of individuals who will need assistance with personal care (bathing, dressing, eating, etc.) is projected to reach 80 million by 2040.
As these numbers climb, concerns about the cost of care for these individuals have also grown.Â
Additionally, the need for families to educate themselves about how caregivers can help prevent additional medical costs is even more critical.
Home care can be expensive, and coverage under specific healthcare plans may not be sufficient for those on a budget.
In fact, a 2021 long-term care trend poll found that a majority of older adults do not feel adequately prepared for the high cost of long-term care.
With this in mind, caregivers of older adults must learn more about long-term care insurance plans to help them choose the best option for their older adult’s needs.
What is Long-Term Care Insurance?
Long-term care insurance (LTC) is a type of insurance that provides coverage to chronically ill or disabled people who can no longer care for themselves.
This type of insurance provides daily or monthly assistance with the costs of long-term care services and is available under two types of policies: hybrid or traditional.
2 Long-Term Care Insurance Options
1. Hybrid long-term care insurance
Hybrid policies are the most common type of long-term care insurance and can serve multiple purposes. Traditional policies serve only one purpose.
Under a hybrid policy, enrollees receive a monthly benefit that covers most or all of the cost of long-term care.
These insurance premiums can be paid in full up front or in fixed installments.
An added value of hybrid policies is the ability for any unused benefits to be converted into a tax-free life insurance death benefit for the enrollee’s heirs.
2. Traditional long-term care insurance
On the other hand, less popular traditional policies serve a single purpose: covering costs if your older adult needs long-term care. This type of policy doesn’t include a death benefit.
Traditional policies will also provide benefits only to those who are ill enough to require long-term care.
How Much Does Long-Term Care Insurance Cost?
The downside to long-term care insurance is that it’s not very affordable.
According to data from the American Association for Long-Term Care Insurance, the average annual premium in 2021 for a couple aged 55 was $2,050 for a policy that would pay up to $165,000 in future care costs for each.
This is also without inflation factored into the payments, as premiums can be costly for policies with preset levels.
Long-Term Care Coverage from Medicare and Medicaid
On a limited basis, Medicare covers the full cost of medically necessary at-home health care for those who are unable to leave their home without assistance.
Coverage includes skilled nursing care, occupational, physical, and speech therapy, and home health aide services.
While original Medicare covers typical home care, such as bathing and dressing, and basic medical care, such as checking vital signs and dressing wounds, this coverage is limited to part-time services. It applies only if a doctor includes it in the broader care plan.
Otherwise, private insurance policies, such as Medicare Advantage plans, offer broader long-term care coverage for at-home health services.Â
Medicaid, a joint federal-state program, provides coverage for in-home care in addition to residential and nursing home care.
It’s important to note that Medicaid has fewer limitations on home health services than Medicare.
Durable Medical Equipment: Another Important Tool for Long-Term Care
Often, someone who needs at-home care due to a disability or illness also needs durable medical equipment (DME) to help with more common conditions like incontinence, sleep apnea, and diabetes.
Among people aged 65 and older, more than half living at home reported bladder and/or bowel incontinence, 56% have a high risk of obstructive sleep apnea, and more than 1 in 4 have diabetes.
Supplies, including incontinence briefs, CPAP machines, and continuous glucose monitoring systems, can be covered by insurance.Â
That’s why caregivers need to review DME coverage in their insurance plans when considering long-term care options.
How to Ensure Medicare Plans Cover Durable Medical Equipment
To ensure a Medicare plan covers the durable medical equipment their older adult needs, caregivers should check what each option covers for DME.
Original Medicare covers DME when a doctor or other healthcare provider prescribes the equipment for at-home use, and the supplier is enrolled in the Medicare program.Â
However, a copayment is required, and the out-of-pocket amount will vary by DME type, as Medicare pays each type differently.
Medicare Advantage plans must provide the same level of coverage for medically necessary items and services as original Medicare, but specific costs will vary by plan.
Enrolling in a Medigap (supplemental) policy can help cover costs not covered by Medicare or Medicare Advantage.
Medicaid often covers 100% of DME costs, but eligibility is limited to low-income individuals with limited assets.
Caregivers Can Help Older Adults Choose the Best Plan
No matter what care individuals choose for themselves, they must consider their overall financial situation, how they will pay for their policy, and their age and health.Â
As individuals get older, it becomes harder to navigate these plans.
Family caregivers can step in to help ensure the individual they’re caring for chooses the best plan for their in-home care needs, covering assistance with daily activities and durable medical equipment.
Recommended for you:
- How to Estimate Long Term Care Costs to Make Care Decisions Easier
- Cost of Long Term Care: 5 Ways Estimates Help Seniors and Caregivers
- How Medicaid Spend Down Helps Seniors Qualify for Long Term Care Benefits
Guest contributor: Amanda Baethke is the Director of Corporate Development at Aeroflow Healthcare. This leading durable medical equipment provider supplies patients with innovative home healthcare solutions through insurance to lower healthcare costs and improve the quality of life for seniors.
