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Long Term Care

Long term care services are required for any chronic or disabling condition that need nursing care or constant supervision. Long term care does not mean nursing home care alone, it can also be received in a patient’s own home where he or she can be helped with the activities of daily living, such as dressing, eating, bathing and taking medicine. Long term care services can be of various types, including institutional care, i.e., nursing facilities, non-institutional care such as home health care, personal care, adult day care, long term home health care, respite care and hospice care.

As long term care is highly expensive, it is beyond the capacity of most people to pay for such services for too long. Long term care insurance is an insurance product sold through a licensed insurance agent representing the insurance company or an insurance broker representing the policy-owner in the United States, that helps provide for the cost of long-term care beyond a pre-determined period. Long term care insurance covers care usually not covered by health insurance, Medicare, or Medicaid.

Although the name suggests so, long term care should not necessarily be long term. A patient may require care for a few months only to recover from surgery or illness. As a person grows older, the chance of requiring long term care increases. In the U.S. Medicare will not cover the expenses of long-term care, but Medicaid will for those who find it impossible to pay. Furthermore, age has nothing to do with long term care. It has been observed that nearly 40% of those receiving long-term care are between 18 and 64. Long term care insurance may not be available if a health condition occurs.

Although Medicaid usually does not cover long term care provided in a home setting, it does provide services, deemed medically necessary, for people with low income or limited resources who "need nursing home care but can stay at home with special community care services." If you buy home care plan, long term care insurance can pay for home care, sometimes from the first day it is required. It will cover the expenses incurred for a live-in caregiver, companion, housekeeper, therapist or private-duty nurse up to 7 days a week, 24 hours a day. Long term care insurance will pay for assisted living, as well as adult day care, respite care, hospice care and more. Long-term care insurance can also help pay expenses for caring for a person who suffers from Alzheimer's disease or other types of memory loss. It also suits those persons who feel uncomfortable relying on their children or family members for support. Another advantage of long term care insurance is that premiums paid on it may be eligible for an income tax deduction. The size of the deduction will depend on the age of the covered person according to IRC rules.

At present, you find two types of long term care plans in the United States: Tax Qualified (TQ) and Non-Tax Qualified (NTQ). The latter (NTQ) usually contains a "trigger" called "medical necessity" which means that the patient's own doctor, or that doctor in conjunction with someone from the insurance company, can state that the patient needs care for any medical reason and the policy will pay. In this case, benefits are taxable. The former (TQ) does not include a “medical necessity” trigger and requires that a person be expected to require care for at least 90 days, and be unable to perform two or more activities of daily living (eating, dressing, bathing, transferring, continence) without considerable assistance (hands on or standby) and that a doctor provides a Plan of Care; or that for at least 90 days, the person requires substantial assistance (hands on, standby or reminding) due to a severe cognitive impairment and a doctor provides a Plan of Care. Benefits, in this type, are non-taxable.



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