A recent study done by the U.S. Department of Health and Human Services indicated people who reach age 65 will likely have a 40 percent chance of entering a nursing home. About 10 percent of the people who enter a nursing home will stay there five years or more. This year, about nine million men and women over the age of 65 will need long-term care. By 2020, 12 million older Americans will need long-term care. Most will be cared for at home; family and friends are the sole caregivers for 70 percent of the elderly. Most of the sole caregivers (90%) will be women and 10% men. Out of the 90% women, 63% will encounter a shorter life expectancy due to the stressful situation.

This statistical information provides some insight but cannot predict the future. You may be one of the fortunate never needing LTC. Insurance companies have been quick to capitalize on the LTC necessity by suggesting consumers are likely to wind up spending years in a nursing facility.

The actual odds of a long nursing facility stay are considerably lower than the insurance industry would like you to imagine. You might not need enough care to collect much in the way of insurance benefits. Long-term care insurance is very expensive, not affordable for many Americans and may not be a good investment.

In the article "Long-Term Care Insurance—The Risks and Benefits" written by Joseph Matthews, posted on August 22, 2011, he indicated, " Two-thirds of all men and one-third of all women, age 65 and older will never spend a day in a nursing facility, most nursing facility stays are brief -- only about 10% of men and 25% of women age 65 and older spend more than a year in a nursing facility, only 10% of all nursing facility residents will stay longer than three years, more than half of all nursing facility stays last six months or less and the average stay of those who enter a custodial care facility is about 18 to 20 months."

It is Mr. Matthews’s opinion "The insurance companies do not pay out on their policies to nearly the extent they suggest when they sell the policy. When the policies' conditions, exclusions, and benefit limits are figured in, the performance of these policies has been quite poor -- at least in the decade of the 1990s, for which complete statistics are available. Only about half of all LTC policies lapsed before any benefits were paid; policy holders were unable or unwilling to continue paying their premiums. Of those people who bought insurance and later entered a nursing facility, about half never collected a dollar from their LTC policies. No benefits were ever paid to the many people who bought nursing facility coverage but instead received home care or entered a residential facility not covered by the insurance. When LTC benefits were paid, they were usually far below the actual cost of care. For many of the longest-term residents, benefits were used up before the nursing facility stay ended. In all of these situations, LTC insurance failed to live up to its promise to help people avoid using up their savings or relying on Medicaid to pay for long-term care. In other words, it was a lousy investment."

In response to pressure from consumer groups, embarrassing media exposure, and increased competition from other insurers joining the market, LTC policies have improved somewhat in recent years. The policy language is somewhat clearer, and the type of services coverage may be more flexible. However, the buyer will need to do comparison shopping among several policies with checking each for exclusions and limitations. Don't base your decision solely on advice from an insurance agent or broker who is trying to sell you a policy. Check the latest analysis of LTC policies by Consumer Reports, a consumer information magazine that regularly does comprehensive studies and comparisons of particular policies.

Ask an accountant, long-term care attorney, or other financial advisor whether there might be more profitable ways of investing the money you would otherwise put into insurance premiums. Those investments may provide better protection and liquidity for your money than a long-term care insurance policy, and you'll have to spend that money on care only if you need it. This may be the only option for those unable to health qualify for long-term care insurance.

LTC insurance may only be a consideration for those who own their home, have substantial assets of over $300,000 and over $50,000 per year in income (in today's dollars). When LTC does become an issue, this financial buffer will be needed to continue paying for the insurance premiums and the LTC costs not covered by the policy. Looking for a long-term care policy with high benefits and compounded inflation protection might be a reasonable investment for them. There is no sure thing the premiums will stay the same over the lifetime of the policy.

In the recent article (by Kimberly Lankford, Contributing Editor Kiplinger’s Personal Finance), the John Hancock Insurance Company wants to hike LTC insurance premiums for the bulk of its customers by an average of 40% this year. The president of John Hancock Long-Term Care Insurance Division, Marianne Harrison, indicates "The specific size of the increase may vary, depending on your age and when you purchased the policy, indicated by Marianne Harrison, president of John Hancock Long-Term Care. The increase applies to both individual and group policies, and the largest increases will be restricted to older policies. But the rate hike will not apply to Leading Edge or Custom Care II Enhanced policies, two of their newer policies that are subject to stricter standards for setting premiums. Nor will the price hikes affect the long-term-care policy run by John Hancock for federal employees, which already had a premium increase of up to 25% in the spring."

Not a pretty picture for their clients. Those holding the oldest policies, in all probability, would be over the age of 65, another classic example of beating up on the elderly.

It goes without saying our US government, in many instances, has left the elderly to fend for themselves. Many expected Medicare to pay for long-term care finding out when needed, it only paid for medically necessary skilled nursing facility or home health care. The restrictions imposed by Medicare for the medically necessary services usually ended up not qualifying.

Most long-term care is to assist people with support services such as activities of daily living like dressing, bathing, and using the bathroom. This type of care called "custodial care" (non-skilled care) is not covered by Medicare. It is care that helps you with activities of daily living and may also include care that most people do for themselves, for example, diabetes monitoring.

Some Medicare Advantage Plans (formerly Medicare + Choice) may offer limited skilled nursing facility and home care (skilled care) coverage if the care is medically necessary. Buyers need to be aware and have a clear understanding of the coverage because they do vary depending on where you buy them.

Medicaid is a State and Federal Government program that pays for certain health services and nursing home care for older people with low incomes and limited assets. In most states, Medicaid also pays for some long-term care services at home and in the community. Who is eligible and what services are covered vary from state to state. Most often, eligibility is based on your income and personal resources, plus what the state budget will cover.

While reading through some of the articles regarding the LTC issues, the authors suggested keeping healthy may be a way of warding off the future necessity. This is very good advice, but we should also direct any concerns to our government representatives who make the decisions regarding comprehensive Medicare long-term care coverage.

The following statistical information from the Alzheimer Disease Facts and Figures Report for 2011 demonstrates just one reason comprehensive Medicare long-term care coverage may be necessary:

In July 2002, the issue of long-term care became a reality when my husband was diagnosed with Alzheimer’s disease. As designated by the progressive stages, home health care, adult day health care and facility home care services were provided. Determining when to provide each service was difficult because it required constant monitoring. Keeping him healthy and secure was ultimately my responsibility.

When reading the book "The 36-Hour Day—A Caregiver's Guide to Alzheimer's Disease", Patricia Callone suggested using family members, a trustworthy neighbor or a friend as the care-giver in the beginning stage in order to reserve the necessary funds ($2,000-$6,000 a month) for the middle-end stages.

She also recommended executing any legal matters, such as, a durable health power of attorney, a durable financial power of attorney, a living will, and a family trusts. It is best to process the legal matters before the Alzheimer’s disease diagnosis. Most elders have accumulated their wealth by the age of 65-75 still enabling them to clearly designate the beneficiaries of the assets upon death. The trust could specify the distribution of any wealth accumulated thereafter.

Our family members wanted to help, but it was not an option, nor was relocating. Today many families are faced with the same dilemma. Due to the lack of suitable employment and a stagnating economy it is nearly impossible to rely on family members no matter how much they want to help.

Most of my husband’s care was out-of-pocket expenditures. The Veteran Administration partially paid for his adult day health care. It was our responsibility to pay the initial $1,800 deposit and some of the daily adult day health care. Fortunately, the VA paid for most of his adult day health care over the four months. If it were not for his military service during wartime, he would not have been eligible for this coverage.

During the last five-month of his life, the "custodial" long-term care costs were $2,000-$5,000 a month. This figure included prescriptions medicines, which were ordered by the facility’s holistic-medicine physician.

I thought the prescriptions would be covered by the supplemental insurance company. However, the Inter-Group Supplemental Insurance Company would not cover the Alzheimer’s disease prescriptions ($500 a month) and the diet-supplemental prescriptions because Medicare considered them experimental. In addition, we were paying a total of $595 for his Medicare Part B and Inter-Group supplemental insurance.

Medicare might have paid some of the Hospice services during the last 3 months, but paid nothing towards the non-medical "custodial" care $2,000-$5,000 costs.

For those not familiar, Medicare will only pay 80% of what they consider eligible medical services. The supplemental insurance companies will pay the 20% only when Medicare considers it eligible medical services. In addition, the patient will need to cover the costs of the co-insurance payments. This is why, in our case, the Inter-Group Supplemental Insurance Company did not pay for the diet supplemental and the Alzheimer’s disease prescriptions.

Much of my husband’s care could have been handled at home if I had not needed to work until my retirement. Home health care services are somewhat affordable, but in many cases they too are not covered by Medicare if they are for non-medical "custodial" care.

The final outcome, if he had lived longer, would have been to place him in the state AHCCCS program. According too many, not a very good option. This would have been done to preserve a portion of our assets for my future needs.

The AHCCCS financial assessment at the time of inquiry was to take 50% of our total asset value, his monthly Social Security benefits and his monthly Arizona State Retirement pension. This would have been turned over to them upon placing him into the state health system. I would have had to pay additional monthly payments to AHCCCS due to not being able to draw out a 50% lump-sum from my deferred compensation retirement plan.

From all appearances, it looked like I might have ended up with the small condominium, 50% of my deferred compensation retirement plan and an older automobile, along with the condition of paying monthly payments to AHCCCS for the other 50% of my deferred compensation retirement plan. This did not become a reality because my husband died shortly before making the final decision to place him in AHCCCS care.

Many state health care programs no longer provide for long-term care. Availability through the AHCCCS program may be limited or non-existent due to the state budget deficit problem.