Make Sure Your Coverage is for the Long Term

Having a long-term care policy in place is not only a comforting feeling, but also a financially sound one.

With 2011 right around the corner, individuals should take note that a new employee benefit is en route for millions of American employees – access to long-term care insurance.

For those not aware, LTC offers funds for in-home or nursing home care in the event of longer-lasting illnesses or disabilities not covered through regular health insurance.

Starting Jan. 1, 2011, the CLASS Act (Community Living Assistance Services and Supports) becomes law. This act is part of health reform that offers an employer-administered “public option” for long-term care insurance.

According to one industry analyst, this new reality will increase the issue of private alternatives. He believes employers of all sizes will begin presenting their employees with a full range of choices, private as well as public.

He adds that a compelling reason for employers to do so is that millions of employees are already caregivers to loved ones and are not aware of what options they have for their own long-term care. Additionally, many of their employers who take part in the CLASS Act will automatically be enrolling them in the public plan, with payroll deductions, unless they opt out.

Given this is what the law mandates, employees will be upset if they have not been educated regarding all their options.

As it turns out, today only a minimal percentage of businesses include long-term care insurance as an employee benefit. Given all the attention being levied by the CLASS Act, this will change.

According to the U.S. Department of Health and Human Services, at least 70 percent of individuals over age 65 will need some long-term care services at some junction in their lives. And according to a survey from MetLife, the average expense of a private room in a nursing home is presently approximately $80,000 per year, and increasing.

In a review of the long-term care process, it turns out there is a catch for businesses.

Long-term care insurance is proving more complex and necessitates added time to comprehend than dental, vision, and even health insurance. Not many businesses are ready to detail the complexities so employees can employ the best choice – not only between the CLASS Act and private options, but the best choice among the numerous private options.

Another tidbit for consumers to note is that costs for long-term care coverage increased slightly in 2009, approximately 2 percent above costs in 2008.

As an example, a 55-year-old person thinking about long-term care protection can look to pay around $723 yearly for a base level of protection if they are married or $1,060 if they are single, according to the annual Long-Term Care Insurance Price Index, published the end of last year by the American Association for Long-Term Care Insurance.

The study also looked at expenses for top-selling long-term care insurance policies that provided about $115,000 in present benefits, with protection increasing each year as the individual ages.

According to a spokesperson from the group that conducted the study, a solid base plan of protection will accrue in value to more than $305,000 of protection 20 years from now.

If you have not looked into long-term care coverage in the past, now could very well be the time to do so.