Many people believe medicare or medicare supplement policies will pay for this care if they need it. Medicare will cover nursing home care if it is part of the treatment for a covered injury or illness, but care needed because of aging is not covered by medicare or medicare supplements. Medicare and supplementary insurance pay for skilled nursing care, but the coverage is extremely limited (the care must immediately follow a period of hospital confinement, and no benefits are provided after the 100th day). Medicaid does pay for nursing home care, but provides coverage only for needy families.

Sadly, many people must pay for their own nursing home care and eventually turn to medicaid when their life savings are gone.

LTC policies are still evolving. However, with attention to the problem of long-term care firmly focused, legislators and the insurance industry have begun to come to grips with the far-reaching ramifications of health services for an older population. With the federal government responding to consumer interests in long-term care coverages, the National Association of Insurance Commissioners (NAIC) developed a model to help state legislatures in an effort to keep regulation on a state level. More than half of the states currently use the NAIC or a similar model.

Key issues include

• A benefit period of at least one year
• Strict restrictions on cancellation, specifically prohibiting cancellation due to the insured’s aging; most policies now guarantee renewability
• Standards for covering preexisting conditions
• A free-look period
• Prohibition of exclusions for Alzheimer’s disease Another factor in the evolution and increasing availability of LTC policies is that consumers, too, are more aware of the following:

• Medicare does not cover long-term care (much to the surprise of most of the population, who at one time believed medicare did cover most nursing home care).
• One in four people are likely to spend at least some time in a nursing home after age 65, increasing to about a third if they live to age 85.
• The average cost for nursing home confinement is currently about $3,300 per month and can be as high as $5,000 per month, depending on location and level of care. These costs are likely to continue growing.