Origin Of Long Term Care Insurance

In the early 1980's Medicare started using aLong Term Care Insurance. The long term
system called the diagnosed related group ofinsurance rates vary by geological location, as well
guidelines for advance payments to hospitals. Thisas state and local regulations. The premiums are
has really given hospitals authority and incentive tocostly, however, a person has to weigh out the
discharge patients very soon after admission toadvantages and disadvantages to purchasing long
the hospital.term care insurance.
The hospital gets paid the same whether theMany people assume that their healthcare
patient is in 3 days or 6 days. So the hospital canprovider will cover long term care. Unfortunately
make more money if they free up the bed spaceHealth care insurance covers medical bills, hospital
for the next patient. The problem this has causedbills and some prescriptions. They do not cover
is that nursing homes have become the recoverynursing home expenses. The same rule applies for
place for these patients that were not ready toMedicare. Medicare will pay for skilled nursing home
go back to their homes. The problem with this iscare only for patients that are able to fully
that Medicare only pays up to 21 days of skilledrecover from their injuries or illnesses. Then the
nursing care. Therefore, if a patient is notmyth is that a person can always fall back on
recovered after the 21 days in the nursing home,Medicaid, but Medicaid is for the people who fall
then the funds come out of the patients estate,under the low income guidelines and have little or
provided they have one. Needless to say, it doesno assets.
not take long to eat up one's estate at theIf a person can afford long term care insurance, it
nursing home rates.is highly recommended that they purchase it
Insurance companies have just in the last decadewhen they are young, as the rates are
recognized this problem and now are offeringsubstantially lower.