Merck Manual

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Long-Term Care Insurance


Roger I. Schreck

, MD, Merck Manual

Last full review/revision Dec 2020| Content last modified Dec 2020
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In the United States, health care services for older adults are funded mainly by Medicare, Medicaid, the Veterans Health Administration, private insurance, and out-of-pocket payments. In addition, many states offer health-related benefits and programs, such as subsidies for transportation, housing, utilities, telephone, and food expenses, as well as help at home and nutrition services. Health care workers should help older patients learn about health benefits and programs to which they are entitled.

Very few private medical insurance policies cover services such as long-term home health care or long-term nursing home care. However, some private insurers separately offer long-term care insurance. Such plans are useful for people who want to preserve their assets and who can afford to pay the premiums until care is needed, possibly for an extended period of time. This insurance is not recommended for people with few assets and may not be worthwhile for people who can easily pay for long-term care.

Benefits usually begin when a person can no longer do a certain number of activities of daily living (ADLs).

Some plans, called tax-qualified plans, offer tax advantages (eg, deduction of premiums from taxable income as medical expenses).

For all long-term care services provided in the United States, most expenses are paid through Medicaid and other public funding; private insurance pays for only 9%, and people pay for 22% out-of-pocket. A large proportion of out-of-pocket spending occurs as older adults spend down to qualify for Medicaid.

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