The expense of providing healthcare services is spraining government and family budgets, as costs soar due to rising pharmaceutical drug prices, provider services and inflation. Apart from ageing population, factors such as higher incidence rate of chronic diseases, rise of long term care diseases such as Alzheimer’s and Parkinson’s, also add to the strain on long term care demand. Long-term care involves a wide range of services for people who require caregiving support on a routine basis owing to chronic illness or physical or mental disabilities. Contrasting other health services, long-term care is not usually planned to treat an illness or condition. Although it can involve skilled caregiving by professional nurses, it largely consists of assistance with fundamental activities of daily living (such as bathing, eating, dressing, and using the toilet) and with activities obligatory for independent living (such as shopping, cooking, and housework).
Since 2004, long term care overheads have increased 4.7%-6.6% per year resulting in an overall rise of 31-47%, based upon the type of care. Long-term care costs hence signify one of the greatest uninsured financial risks facing the aged and most vulnerable population in the United States. In 2004, long term care expenses represented 8.5% of the overall healthcare expenditure amounting to $135 billion and 1.2% of GDP.
This write-up focuses its attention towards hedging that financial risk with the use of long-term care insurance. It describes the definition and importance of long-term care insurance, customer profiles and behaviors of long-term care insurance and its precedence in the United States with respect to other countries.
What is Long Term Care Insurance? Why is it so important? Long-term care insurance is an insurance product that underwrites individuals requiring long-term care due to old age, injury or chronic illness. Even though most people consider long-term care insurance with only elderly care, there are over five million working age adults and 400,000 children that require perennial support with the daily living activities cleaning, dressing, eating, moving, and continence, and if the patient requires a need for such assistance with any of the above routine activities, or a cognitive mutilation, he or she is entitled to obtain long term care insurance benefits. The kinds of care that long-term care insurance incorporates are support with the tasks of daily living, home nursing, 24-hour skilled attention, and transitional and supervisory care (Consilium, 2011). Most insurance plans also reimburse expenses for alternative care conveniences such as assisted living, and for hospital care. There are guidelines that are for nursing homes, home care and inpatient hospital care. The long-term care insurance policy lays out how much it will re-compensate depending on the level of care required. Furthermore, each insurance plan is devised to fit discrete needs and finances, thus each individual can choose exactly how much and what type of coverage he or she wants. Upon the selection of Long-term care insurance plan, the insurance holder decides upon the plan structure and benefits that he or she wants to receive. These benefits include: Daily benefit level: The insurance holder has the liberty of selecting the daily benefit he or she wants to receive from a range of daily benefits available to pay for nursing home care. These benefits can also be