LONG TERM HEALTH CARE INSURANCE

Source: BILL CURTIS

First let's agree on short vs long term health care. Your regular health insurance (Kaiser, Blue Cross, etc) is Short Term Health Insurance. It is designed to help you get better in a short period of time. But what if you get better, you do not require medical attention, but you need help with normal daily activities? This is what long term care is about, and long term care insurance covers what short term health insurance does not cover.

Everyone wants to know how much long-term care insurance costs and when they get the price they often delay purchasing it. What delaying might mean to you.
A fair number of baby-boomers are facing the long term care reality with their parents. Often what happened with the boomer's parents will influence the boomer to do one of two things, get long term care insurance or continue to self-insure.

Some people decide to look into long term care insurance then they get sticker shock, which I will address later. If they do not get insurance they are in effect deciding to self-insure or pay themselves.

Keep in mind that the younger you are the cheaper it is and if you have a change of health before you buy insurance you may not qualify which means you'll be on the road of paying yourself (or applying for welfare/Medicaid).

Do you have any idea of the risk of needing long term care? Everyone wants to have short-term health insurance in case they have a catastrophic health event happen. And many pay a lot of money for a low-deductible health plan. One option is to see if your HMO, PPO offers a high deductible plan or consider a HSA, Health Savings Account. Again the purpose is to insure against a catastrophic health event, not a doctors visit for a cold.

The same concept is true for long term health care and long term health care insurance. It's all based on risk. According to a 2006 GAO (Government Accounting Office) report, 60% of Americans will need long term care. This number will increase as the baby-boomers age. But let's say for this example your chances are only 50/50.