Other types of health-related coverage include long-term care
insurance, disability insurance, and supplemental insurance.
Long-Term Care Insurance
The purpose of long-term care is to provide the help you need to
perform activities of daily living—such as bathing and dressing
yourself. Or, you may need supervision because of dementia or
another form of cognitive impairment. In addition to this custodial
care, some people also need skilled nursing services due to serious
illness.
You can receive long-term care in a nursing home, assisted living
facility, or in your own home. The need for long-term care can arise
at any time, regardless of your age. Older people use the most longterm
care, but younger and middle-aged people sometimes need
long-term care as well. You may need long-term care because of a
chronic illness or disability that leaves you unable to care for
yourself for an extended period of time.
Long-term care can be very expensive. On average, a year in a semiprivate
room in a nursing home costs about $58,000 (estimated
annual cost in 2005). In some parts of the country, it may cost
much more.
Home care is less expensive than nursing home care, but it is still
costly. Home care can include part-time skilled nursing care, speech
therapy, physical or occupational therapy, home health aides, and
homemakers. Having the services of an aide in your home just three
times a week—to help with dressing, bathing, preparing meals, and
similar household chores—can easily cost $1,000 or more a month.
If you add in the cost of skilled help, such as physical therapy, the
costs can be much higher.
Long-term care—whether in a nursing home, assisted living facility,
or your own home—usually is not covered by health insurance
except in a very limited way. Medicare generally doesn’t cover longterm
care.
Long-term care insurance can help protect you from the high costs
associated with this type of care. Most long-term care policies pay a
fixed dollar amount, which can vary quite a bit—from as little as
$40 a day to more than $200 a day. The daily benefit for at-home
care usually is about half of the benefit for nursing home care.
In order to get the lowest rates, you should apply sooner rather than
later for long-term care insurance. Your age and any medical
conditions you may have will affect your eligibility for coverage and
how much it will cost (the premium). Recent changes in Federal
law may allow you to take certain income tax deductions for some
long-term care expenses and insurance premiums. In addition,
some States may give a partial deduction or credit toward State
income taxes for these costs.
Traditionally, the annual rate of increase in the cost of long-term
care services has risen more quickly than it has for other consumer
services. This means the benefit you buy today may not be enough
to cover higher costs in the future. You can choose a plan with an
inflation adjustment feature so that you can be protected against the
rise in long-term care costs over time until services are needed.
Long-term care insurance may be offered where you work, or you
may be eligible through a union, fraternal group, or other
organization to which you belong. In addition, many life insurance
companies offer long-term care insurance directly to the consumer.
Disability Insurance
Disability insurance replaces income you lose if you have a longterm
illness or injury and cannot work. This is an important type of
coverage for working-age people to consider.

Disability insurance is not usually considered a form of health
insurance, and it doesn’t cover the costs associated with
rehabilitation following an injury or illness. Often, these costs are
covered under the major medical part of your health insurance plan.
Benefits paid under a disability plan can be used for expenses at the
discretion of the insured, for example, rent, utilities, or groceries.
Some employers offer group disability insurance. Check with your
employer to find out if this coverage is available. Disability
insurance will be less expensive if your employer contributes toward
the cost. Many different kinds of individual policies are also
available. Contact your insurance company to find out if it offers
disability insurance coverage.
Supplemental Insurance
Different types of coverage are available to you that pay benefits
when specific types of events occur, such as hospitalization or
critical illness. This coverage usually will pay a cash benefit that can
be used to cover additional expenses that you incur due to the
event. This type of coverage may be available from your employer
or directly from an insurance company.