How Long Term Care Affects Your Financial Plan
Does Health Insurance Pay for Long Term Care? (Part 2 of 6)
People frequently tell me they think their health insurance will pay for long term care expenses. It's one of the top reasons people think they don't need long term care planning or long term care coverage. Let me clarify what health insurance covers and, more importantly, what it does not.
Health insurance helps us get better when there's an expectation of improvement and care is delivered by professionals who provide "skilled care." Medical services that are typically covered by healthcare insurance are delivered by someone with a lot of training such as a medical doctor, physician assistant, physical therapist or a registered nurse. Services may include care like tube feeding, physical therapy or intravenous treatments. These services are delivered when there's an expectation of improvement and possible recovery.
Long term care is used when, unfortunately, a person is not going to get better. Their condition is considered chronic when their health is not going to improve. Long term care is not provided by licensed medical professionals, but by individuals classified as "unskilled." Examples of unskilled caregivers are family members, home health aides and personal care attendants. With long term care, individuals and their families are dealing with the after-effects of having lived a long life or perhaps a post-retirement disability.
Understanding this distinction between skilled and non-skilled care is critical to protecting your financial plans. Consider your health insurance and long term care insurance as bookends. Healthcare coverage typically pays for skilled care when there is an expectation of you getting better. The long term care coverage covers expenses when there is no expectation of improvement using unskilled care.