What is Short-Term Care?

As insurers are hiking premiums and making it more difficult to qualify for long-term care insurance, steam is getting an option: short-term care insurance.

Like long-term care insurance, short-term policy typically covers home care, assisted living and nursing homes when you are unable to look after yourself. But instead of paying for years of care, insurance for short-term care, also known as care for recovery, typically offers advantages for 12 months or less. Typically, short-term care insurance is used as an alternative to long-term care insurance to cover gaps in Medicare coverage.

Why buy short-term care?

Even short-term care can cost you many thousands of dollars quickly.

LongTermCare.gov found the national average costs include: 

• $225 a day or $6,844 per month for a semi-private room in a nursing home.
• $253 a day or $7,698 per month for a private room in a nursing home.
• $119 a day or $3,628 per month for care in an assisted living facility (for a one-bedroom unit).
• $20.50 an hour for a health aide.
• $20 an hour for homemaker services.
• $68 per day for services in an adult day health care center

With these types of expenses, short-term care coverage can assist you. You can get a plan to give $100, $150 or $200 a day to help with the cost. That may not sound like a lot, but add up over a month and after $200 a day you’ve got $6,000.

Among this restricted coverage’s largest selling points: price. According to the American Association for Long-Term Care Insurance, a trade group, these are typical premium costs:

• At age 65 — $105 monthly
• At age 70 — $141 monthly

In relation to Medicare, short-term care also pays, whereas long-term care insurance does not. For some buyers, simplicity might be another benefit. The application method is quicker and simpler compared to the long-term care insurance method, so there is no medical examination needed. Application for short-term care typically includes simply completing a brief questionnaire. You can also purchase short-term insurance up to 89 years of era, while most long-term care policies cut off candidates at around 75 years of era.

How does short-term care work?

It’s pretty straightforward: you pick a benefit amount, usually offered in increments of $10 from $50 to $300 a day, and the number of days you want to receive the benefit (up to 360 days).

Most policies are implemented instantly. That implies that the policy pays you qualify for advantages on the very first day. Most traditional insurance policies for long-term care (about 94%) are awarded with a 90-day deductible that must be met before advantages are earned.

The triggers for short-term care insurance benefit eligibility are generally the same as long-term care coverage triggers. The policy pays for care if the insured is unable to carry out at least two of six “daily-living operations” without assistance— eating, bathing, moving in and out of a chair or bed, dressing, toilet and continence— or has a cognitive impairment.

Short-term care buyers: Who are they?

 Short-term care policies are a good addition to traditional long-term care insurance for some buyers because they provide some protection when you need care for that 90-day period. Short-term care is an affordable option for others who either waited too long to purchase long-term care and are now priced out, or for those who can’t afford it all but want some security.

It is true that some long-term care claims last many years ; however, according to the short-term care advisory center, nearly half (49 percent) of long-term care insurance claims last one year or less.

The American Long-Term Care Insurance Association has suggested that individuals interested in short-term care insurance include:

• A person declined for traditional long-term care coverage. 
• Someone who wants a cheaper option to traditional long-term care insurance.
• You’re over 80 years old.  
• You want to cover the elimination period in your long-term care policy

You have to be between 40 and 89 years old somewhere, depending on the business. Some firms restrict candidates to more, such as not enabling individuals to have a plan beyond 85.

Research firms closely, as with any acquisition of insurance. When it comes to filing claims, some insurers are much easier to work with than others. Look at the company’s complaint track documents and read the fine print to find out precisely what is covered and what is not. Also, when calculating how much coverage you will need, you will want to decide how much you can pay for care.