Study on long-term care insurance: Tips when coverage fails

A recent study from the Center for Retirement Research at Boston College found twenty to thirty percent of the population is best suited to benefit from long-term care coverage.

Setting aside money for retirement is just one step towards future financial security. In addition to funding retirement accounts, a long-term care insurance policy may provide additional protection. This form of insurance is designed to help fund long-term services in the home or at a nursing facility. These policies generally provide a daily amount to pay for daily services like bathing, dressing or eating. The cost is determined with a calculation that takes into account a variety of factors including the policyholder's age, an estimated lifetime maximum amount paid and optional benefits.

A recent study from the Center for Retirement Research at Boston College reviewed these accounts and found that between twenty to thirty percent of the nation's population is optimally suited for benefits from long-term care coverage.

More on the study

The study, Long-Term Care: How Big a Risk?, reviewed data from the National Long-Term Care Survey (NLTCS) and Health and Retirement Study (HRS). Based on this information, researchers found that nursing home rooms cost an average of $81,030 annually and home health care costs approximately $21 hourly. Researchers also found that 44 percent of men and 58 percent of women will require at least some form of nursing-home care.

Despite these high costs, researchers with the study also found only 13 percent of the population purchases long-term care insurance coverage. One plausible explanation for this low percentage is a reliance on Medicaid. Receiving coverage from Medicaid is difficult, as strict criteria are required to qualify. However, those who are covered can generally have nursing home stays of 100 days or less following a hospital stay that lasted longer than three consecutive days covered by Medicaid.

Those with significant assets generally do not qualify for Medicaid coverage. A recent article in MarketWatch notes that Anthony Webb, a lead author and researcher for the paper, recommends coverage for those with assets around "a couple hundred thousand dollars or more."

Tips when coverage fails

Although those with significant assets may be optimal candidates for this type of coverage, others can benefit as well. Those considering a policy should read the language carefully, as some are only short term - paying the cost for only two to five years.

Regardless of the motivation for coverage, policyholders should have confidence that the insurance company providing their policy will honor the policy's conditions. Unfortunately insurance companies do not always follow the terms of the agreement. This can lead to delayed payment, refusal of payment or a reduced benefit. In these instances it is wise to seek the counsel of an experienced long-term care insurance lawyer. Your lawyer can review the details of your claim and work to better ensure you receive the payment you are entitled to.

Keywords: long-term care