LTC(i) - Long-Term Care (insurance)
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LTC (long-term care) refers to the medical, social, personal care, and supportive services needed by people who have lost some capacity for self-care because of a chronic illness or condition. That definition excludes medical care for acute conditions; however, postacute care, such as skilled nursing care and home health care, is often classified as long-term care. Nursing homes are the most prevalent providers of LTC, although home-based and community-based care are increasingly common.
LTC expenses can be paid for in a few ways, the most common of which are by the government (either federal or local) through Medicare or Medicaid programs, out-of-pocket using personal financial assets, or by Long-Term Care Insurance (LTCi) coverage.
LTCi is a private insurance product that pays for the long-term care costs of the policyholder.
For many elderly, government coverage through Medicare and Medicaid are not reasonable options
for complete LTC coverage. Medicare is not designed for LTC, and covers it only minimally, providing for 100 days of care in a skilled nursing facility following a hospital stay of three days or more. Medicare also provides a limited amount of money for in-home care for some homebound seniors. The Medicaid program, which bears the brunt of LTC costs, is aimed at persons with low income or those who spend down their personal assets to pay for medical or long-term coverage.
Many experts believe that reverse mortages hold promise for helping our aging population deal with the high costs of LTC. The American Homeownership and Economic Opportunity Act, signed into law in 2000, waived the two percent HECM reverse mortgage insurance fee if proceeds are used to buy long-term health care insurance (LTCi). Specifically: when a borrower takes out a HECM and uses all of the proceeds to fund long-term care insurance the initial insurance premium will not be collected. The recurring annual insurance premium (one-half of one percent of loan balance: 0.5%) is still collected, however.
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