Long term care insurance pays benefits to people that need assistance with activities of daily living (bathing, dressing, etc.) or require supervision due to cognitive problems. It reimburses them for the costs of extended care at home, adult day care centers, assisted living facilities, or nursing homes.

According to the New England Journal of Medicine, 52% of women and 33% of men will require at least some nursing home care after they retire. Not only do women need long term care more often, they tend to need it for longer periods of time. For instance, 13% of women compared to only 4% of men will need nursing home care for longer than five years. In the Greater Portland Area, the average costs for long term care are $6,000 per month (nursing home), $3,500 per month (assisted living), $70 per day (adult day care), and $20 per hour (home health aide). Nursing home costs have increased nearly 7% per year since 1988.

Medicare or Medicaid will cover these expenses in only certain situations. Medicare pays a maximum of 100 days of skilled nursing home care, plus some rehabilitative care at home. Qualifying definitions are restrictive. In 1994, Medicaid eligibility was expanded beyond solely financial criteria. A person must now satisfy strict medical eligibility criteria as well.

Due to the catastrophic costs for extended health care and the limited benefits from Medicare and Medicaid, long term care insurance offers the most dependable protection available to protect assets and retirement lifestyles. It can be purchased most economically before a person retires. Most long term care insurers offer the coverage to individuals between ages 30 and 84, and the average age of applicants is currently 58. Premiums vary according to an applicant´s age, health, and policy benefit design.

To obtain more information regarding what to consider when purchasing a policy, contact a long term care insurance specialist, or, to obtain a Consumers Guide, call the Maine Bureau of Insurance in Augusta.