Long term care insurance generally covers home care, assisted living, adult daycare, respite care, hospice care, nursing home and Alzheimer facilities. If home care coverage is purchased, long term care insurance can pay for home care, often from the first day it is needed. It will pay for a visiting or live-in caregiver, companion, housekeeper, therapist or private duty nurse up to 7 days a week, 24 hours a day (up to the policy benefit maximum).
Benefits of long-term care insurance include:
- Individuals who feel uncomfortable relying on their children or family members for support find that long-term care insurance could help cover out-of-pocket expenses.
- Without long term care insurance, the cost of providing these services may quickly deplete the savings of the individual and/or their family.
- Premiums paid on a long term care insurance product may be eligible for an income tax deduction. The amount of the deduction depends on the age of the covered person. Benefits paid from a long term care contract are generally excluded from income.
- Business deductions of premiums are determined by the type of business. Generally corporations paying premiums for an employee are 100% deductible if not included in the employee’s taxable income.
Generally, Medicare does not pay for long term care. Medicare pays only for a medically necessary skilled nursing facility or home care. However, certain conditions must be met for Medicare to pay for even those types of care. Medicare specifically will not pay for custodial and non-skilled care.
Medicaid is a government program that will pay for certain health services and nursing home care for older people. In most states, Medicaid also pays for some long-term care services at home and in the community. Eligibility and covered services vary from state to state. Most often, eligibility is based on income and personal resources.