Many people believe they can rely on Medicare to cover the costs of long-term care services that may be needed in the future. What people don’t know is that Medicare and private health insurance programs do not pay for the majority of long-term care services that most people need. In general, Medicare pays for about 20 percent of long-term care and will provide coverage only under specific circumstances. The majority of long-term care is covered by Medicaid. Eligibility for Medicaid and the services that are covered vary from state to state. Eligibility for long-term care coverage by Medicaid is primarily based upon the individual’s income level and personal resources. People with financial means do not qualify for Medicaid until they deplete those resources (1).
Purchasing long-term care insurance is another option for individuals. Long-term care insurance covers the costs of long-term care services including home assistance with Activities of Daily Living and care in a variety of facility and community settings (1). Long-term care insurance policies are very flexible, allowing the individual to choose from a range of care options and benefits. The cost of this insurance depends upon the type and amount of services chosen for coverage, age of the individual when they purchased insurance and any additional benefits they included in their plan.
Only 5 percent of Americans currently have private long-term care insurance (3). Most people are either unaware of this option or chose not to purchase long-term care insurance because they rather wait until Medicaid will cover their costs. In order for Medicaid to cover long-term care costs the patient first must deplete their own financial resources. If the patient has sufficient resources, Medicaid may never cover the costs, leaving the patient with extremely high expenses.
I propose that the federal government enact a bill in which long-term care insurance is offered by medical insurance plans. When individuals sit down to select a medical insurance plan, they should be provided with information regarding long-term care insurance. Long-term care insurance should be introduced as an option for all individuals. “A study by the U.S. Department of Health and Human Services says that people who reach age 65 will likely have a 40 percent chance of entering a nursing home” (2). Introducing long-term care insurance allows individuals to analyze their options and decide what would best suit them. It also provides them the opportunity to pay for long-term care over a period of time.
Purchasing long-term care insurance would initially raise individual costs by raising individual premiums. The individual would be required to pay pre-determined premiums. Payment of these premiums would allow the patient to access long-term care when they need it. Purchasing long-term care insurance at an early age insures the individual will receive care when needed later on in life, instead of being burdened with an extremely high cost after a catastrophe occurs. The cost of long-term care premiums can be reduced, if long-term care insurance is purchased early in life.
Although long-term care insurance would increase individual costs, it would reduce Medicare and Medicaid costs because government insurance companies would not be required to cover all long-term care costs. Legislation proposed by the late Ted Kennedy predicted that shifting long-term care costs from Medicaid to the individual would generate over 70 billion dollars in savings over a ten year period (3). As the number of individuals purchasing long-term care increases, the risk would be spread out among more individuals. This would lower the cost of individual premiums, thus making purchasing the insurance more affordable. As individuals become aware of the increasing likelihood of needing long- term care and the threat of only receiving services at the cost of their life’s savings, the value of long-term care insurance will be realized.
References
1. "Costs of Care." National Clearinghouse for Long Term Care. U.S. Department of Health and Human Services, 5 Dec. 2010. Web. 09 Mar. 2011.
2. "Long-Term Care." Medicare.gov. 25 Mar. 2009. Web. 9 Mar. 2011.
3. Pickert, Kate. "Should Long-Term-Care Insurance Be Part of Health Reform?" TIME. Time
Inc., 8 Dec. 2009. Web. 13 Mar. 2011.
4. Shi, L., & Singh, D. A. (2008). Delivering health care in America: A systems approach
(4thed.). Boston: Jones and Bartlett.
5. Smith, MD, Michael W. "Medicare and Long-Term Care." WebMD. WebMD, LLC, 16 Aug.
2009. Web. 09 Mar. 2011.
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