THE FIRST HEALTH INSURANCE POLICY
The first health insurance policy was what we know today as Disability insurance. It guaranteed an income to the families of injured wage-earners until they were healthy enough to return to work. That is the form of health insurance that president Teddy Roosevelt wanted to make more affordable.
THE SECOND HEALTH INSURANCE POLICY
The type of health insurance that President Obama has spent the past 4 years talking about did not come on the American scene until later.
In the late 1920s, Blue Cross noticed how expensive a hospital stay was. Back then the cost of a hospital stay was more than what a typical American family could pay. If a wage earner needed to go into the hospital it would take several years for them to pay off the hospital bill.
Blue Cross saw a need and filled it. They offered a bill paying service that would accept small amounts of money from several healthy people in order to pay the hospital bills for the unfortunate few.
Four years later, Blue Shield began offering to do the same thing for doctor bills during the Great Depression.
Several years later Blue Cross and Blue Shield merged. Today, they are known as Blue Cross Blue Shield. Although it does not replace the income of an injured wage-earner, it is the most comprehensive medical bill-paying service in America.
LONG TERM CARE INSURANCE
In the late 1970s a company by the name of Genworth saw that the cost of nursing homes was too expensive for most Americans. If an individual had to use a nursing home, their only option was to use their life-savings to pay for it. Once they could not longer pay for their own nursing home bills, they had to rely on Medicaid.
Genworth did the same thing that Blue Cross did 50 years earlier. They saw a need and filled it. Those people who do not want to use their life-savings for nursing home bills and do not want to be tangled up in Medicaid’s red-tape could pay Genworth a relatively smaller premium so that they could pay the larger nursing home bills for those who are unlucky enough to need nursing home care when they got older.
The first Long Term Care insurance policies only covered nursing home expenses. However, nothing stays the same.
In the past several years, the number of people electing to use a nursing home has dwindled. More people have elected to “age in place.” That means that instead of spending money to rent a very expensive hotel room, they have elected to remain in their own home and hire nurses and aides to come to their house to help them.
Today, Long Term Care insurance policies do more than just pay for nursing homes. Actually, less than 15% of those who need long-term care enter a nursing home. By far, most people who need long-term care hire a nurse or home aide to come to their house or elect to move into an assisted living facility.
Long Term Care insurance has evolved with the needs of the American population. Most of today’s Long Term Care policies will pay for Home Care and Assisted Living apartments as well as Nursing Homes.
If your Long Term Care policy is over 10 years old, I encourage you to blow the dust off of it and take a look at what is actually covered. If your policy provides you all the coverage you need, you do not need to do anything. If it does not, I encourage you to contact an insurance professional to see what options are available.