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Understanding LTC

Who Pays for Long-Term Care?

Who Pays for Long Term CareEven in businesses that offer very good health coverage, the costs of the long-term care needed as a result of chronic illness, the natural aging process, or a drawn-out recovery following an accident or illness are not covered. Similarly, it is important to note that Medicare, the primary payer of health insurance for people who reach age 65 and have worked at least 40 quarters in their lives, does not pay for long-term care either.

Unless they have long-term care insurance, people with financial means—and this includes working Americans in middle and upper income brackets—must pay for their own care. The payer of last resort is Medicaid, a government welfare program that requires people to spend down their assets to qualify for assistance—a process subject to a thicket of rules and regulations. Those who qualify often lose control over their care choices—including the option of receiving care at home or in an assisted living facility.

Fortunately, long-term care insurance exists to fill the gap in health insurance—a benefit that is especially powerful when sponsored by employers. Working age people discover the planning challenge while age-based premiums are at their lowest and before the onset of preexisting medical conditions that can cause coverage to be declined.