Short-term vs. long-term care coverage
In this post, we discuss short-term vs long-term care coverage. Most people have heard of long-term care insurance. This coverage pays the cost of care when a beneficiary has a chronic illness, disability, or injury. This coverage also helps individuals who require assistance due to the effects of aging. In general, long-term care insurance helps individuals pay the costs of custodial and personal care. Some people have never heard of short-term care which provides much of the same coverage for a shorter period of time.
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Long-term care insurance
Long-term care insurance provides help paying for custodial care for extended periods of time. The coverage this insurance provides is not provided by either Medicare or other health insurance policies.
Long-term care involves a variety of services designed to meet a person’s health or personal care needs when they can no longer perform everyday activities.
The companies that provide this benefit make money by investing the customer premiums they receive. Due to interest rates going down in recent years, these insurance carriers have lower stream of income. They are also losing revenue due to a rising number of beneficiary claims. This has caused a rise in cost and a lessening of benefits for those who wish to purchase a long-term care plan. Companies have also implemented a more difficult pre-qualification process for those who want to purchase coverage.
For most long-term care policy applications, the cutoff age is 79, while the cutoff age for short-term policies is 89. Long-term care policies have an elimination period, which is a specific number of days that the beneficiary pays for care until the policy starts to pay. A common elimination period for the plans to pay is 90 days.
Home-based care
Many individuals receive long-term care at home by either family members, friends, or neighbors. In most instances, home-based care involves help with “activities of daily living” which include bathing, dressing, eating, taking medications, and supervision for personal safety. This care is sometimes supplemented by paid formal caregivers. The professionals that provide these services include nurses, home health aides, and other professional care givers.
Does Medicare home health care.
Community and residential care
Individuals may receive some long-term care services in their community. There are adult day care services or senior center which may be equipped to provide some degree of care including meals, social activities, personal care, activities or transportation.
Residential facilities: assisted living or nursing homes also provide long -term care. Some facilities provide housing and housekeeping only. Others provide personal care, recreational activities, meals, and medical care.
Short-term care insurance
Short-term care insurance is very similar to long -term care in what it covers, Policies typically cover home care, assisted living, and nursing home care for those who cannot care for themselves. Recovery care is another name for short-term care, because it provides coverage for 12 months or less.
In some instances, short-term care insurance is used to cover gaps in Medicare coverage as a less expensive alternative to long-term care. Short-term care insurance is also a good choice to offset some long-term care expenses before long-term care kicks in.
Some benefits of short-term care insurance
Short-term care insurance does not usually have an elimination period; it generally pays benefits immediately. The cost for short-term insurance is less than log-term because it covers the beneficiary for much less time. Coverage options vary from days up to a year.
It’s easier for beneficiaries to qualify for short-term care insurance, there is no medical exam required. Some companies may ask a few yes-or-no questions. For those who are rejected or cannot afford a long-term care policy, short-term policies offer an alternative.
How to choose a coverage option
- Make sure you get quotes from several different insurance companies before you choose one.
- In this situation, it is a good idea to enlist the help of a licensed agent to be sure you get a plan that best meets your needs.
- Have a budget and understand all the out-of-pocket expenses to be sure the plan is budget friendly.
- Read the policy and be sure you understand what is covered and how it is covered.
Agents if you are looking for an FMO, see what Crowe has to offer.
Important: policy coverage differs by state and some coverage options are only available in specific states.
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