This year, about nine million men and women over the age of 65 will need long-term care. By 2020, 12 million older Americans will need long-term care. Most will be cared for at home; family and friends are the sole caregivers for 70 percent of the elderly. A study by the U.S. Department of Health and Human Services says that people who reach age 65 will likely have a 40 percent chance of entering a nursing home. About 10 percent of the people who enter a nursing home will stay there five years or more. (, updated January 22, 2007)

Long-term care refers to the many services beyond medical care and nursing care used by people who have disabilities or chronic (long-lasting) illnesses. Long-term care insurance helps you pay for these services, which can be very expensive. A policy also ensures that you can make your own choices about what long-term care services you receive and where you receive them.

Life expectancies are continuing to rise due to improved medical techniques, more healthy living, and simply dropping bad habits just to name a few. However, as some people progress through the senior living aging process they may start to need a hand with everyday activities. This type of long-term care can come suddenly and unexpectedly. And, let's not forget to mention that the cost of extended long-term professional care can cost as much as $60,000 per year or more.

While Medicare and Medicare supplemental insurance are protective for the elderly in helping them with the costs of medical care, neither of these programs covers long-term custodial or nursing home care. The only available solutions other than Medicare will be to self-insure or seek out long-term care insurance.

Policies are required to pay benefits based upon the inability to perform, without substantial assistance from another person, certain Activities of Daily Living (ADLs). An individual would be considered "Chronically Ill" if they are unable to perform at least two of the six ADLs for a period of at least 90 days.

The six "Activities of Daily Living" (ADLs) are:

  • Bathing- Washing oneself by sponge bath, or in either a tub or shower, including the task of getting into or out of the shower.
  • Continence- The ability to maintain control of bowel and bladder functions.
  • Dressing- Putting on and taking off all articles of clothing and any necessary braces, fasteners, and artificial limbs.
  • Eating- Feeding oneself by getting food into the body from a receptacle such as a plate or cup.
  • Toileting- Getting to and from the toilet and performing required acts of hygiene.
  • Transferring- Moving into or out of a bed, chair, or wheelchair.

All policies must pay benefits if you are unable to perform three of the six ADLs, however; many policies will pay benefits if you are unable to perform two of the required ADLs. As a result of HIPAA (The Health Insurance Portability and Accountability Act of 1996), prior hospitalization can no longer be used as a benefit trigger for individual LTC policies; instead, the individual must be diagnosed as chronically ill.

Practice Question:
All of the following are activities of daily living (ADLs) as provided under the Health Insurance Portability and Accountability Act (HIPAA), EXCEPT:

A. Walking
B. Bathing
C. Transferring from bed to chair
D. Dressing

Answer: A
The six activities of daily living (ADLs) under HIPAA include: eating, dressing, bathing, using the toilet, transferring from bed to chair, and maintaining continence. If an individual cannot perform two of the activities of daily living for at least 90 days, they would be considered chronically ill.

Long-Term Insurance Coverages

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