Keene - Long-term care insurance covers much

One reason many people balk at buying long-term care insurance is because they think it covers only nursing home care. And nursing home care is not something they want to think about.

Yet only one in five people requiring some type of long-term care actually live in a nursing home. The rest receive care in independent apartments, assisted living facilities, adult day care centers, and most of all, at home -- alternatives that most of today's comprehensive private long-term care insurance policies will cover.

The same cannot be said of Medicaid, the primary payer of nursing home bills in the nation, and Medicare, which pays for limited nursing care following hospitalization. Not all state-run Medicaid programs pay for assisted living, for example, and although Medicare will pay for home care in certain situations, it's for a limited number of visits.

Furthermore, the General Accounting Office reported in September 2002 that although Medicaid programs are expanding to cover alternative care, programs still vary widely in what services are covered and who is eligible. Some states have long waiting lists to get such services.

So investing in long-term care insurance increases your options and may actually keep you out of a nursing home and living independently longer than depending on government assistance. The key is owning the right LTC policy.

Older policies are more apt to cover only nursing home care, or very limited alternative care. A new policy will likely cover home care, assisted living and other alternatives, though not all do.

But be careful replacing your old policy. You want to be sure you're insurable for a new policy first, and you might be better off adding a new policy without dropping the old one.

Furthermore, read the fine print to see exactly what alternative facilities a new policy will cover and under what circumstances. For example, some policies won't pay for assisted living unless the facility is licensed by the state health department. Not all policies cover adult day care. In the case of home care, some policies require that aids be hired through a licensed agency, while others are broader in their definition.

Consumers should also scrutinize any group long-term care policy offered at work. To keep the policy simple and the costs as low as possible, group plans may not cover certain care, such as assisted living facilities, or are more restrictive in home care.

Here are some of the non-nursing home alternatives to consider when buying a long-term care policy:Assisted living

In this increasingly popular type of facility (most of which is private pay), you live in your own apartment, with costs depending on the level of care. You can fix your own meals or eat at communal meals. Staff assistance can vary from simple housekeeping to bathing to medication, and some facilities supervise people with Alzheimer's. Costs are generally less than a nursing home -- sometimes by as much as one-third to one-half.Adult day care centers

They typically provide meals, limited medical care, social activities, and sometimes transportation to and from home.Adult foster care

The person is cared for in a private home, with service ranging from meals to assistance for bathing or dressing, typically by the homeowner. Respite care

Some policies will provide temporary care for a person so a family caregiver such as a spouse can take a break or vacation.Home care

With smaller families and relatives who often live far away, it's become more difficult for families to provide at-home care for a loved one. Or skilled nursing care may be required. Home care may range from light homemaker services to round-the-clock skilled nursing care (read carefully what the policy will cover).

But considering the alternative of a nursing home, this is what many people opt for -- if they can afford it. That's why private long-term care insurance offers more choices than government programs. Some policies even pay for a specialist to help find the appropriate people to provide the services.

Whatever type of service you may require, the best move is to seek approval from your insurance company before using the service. For example, be sure the assisted living facility or home health agency you want to use is approved by the company.

Wm. Gerry Keene III, CFP, RFC, is a Certified Financial Planner practitioner with Keene Financial Group in Cape Girardeau. He is an investment adviser representative with securities offered through InterSecurities Inc., member NASD, SIPC. 800 W. 47th St., Suite 610, Kansas City, Mo., 64112, 816-561-8765 (1-800-827-1929, 33KEENE 335-3363 or ).