Long-term care is defined as a range of services which help meet the medical and non-medical needs of people with a disability or chronic illness who are unable to care for themselves for significant lengths of time. As life expectancy continues to rise, so does the number of people needing long-term care. The US Centers for Medicare and Medicaid Services estimates that about 9 million Americans over 65 needed LTC in 2006 – a number expected to jump to 27 million by 2050. A study by the U.S. Department of Health and Human Services stated that four out of ten people who reach the age of 65 will be in a nursing home at some point in their lives.
In essence, a lot of people will need some form of long-term care in the near future. Most are unaware of the costs associated with long-term care. Original Medicare does not pay for long-term care outright, only paying partly for medically necessary skilled nursing care or home health care. Long-term care insurance can help pay for some of the costs of long-term coverage, but the cost of the premiums for these types of products is on the rise.
The future of funding for long-term care is unknown, but there is an alternative gaining popularity: short-term care. Short-term care insurance covers much of the same costs that long-term care insurance does, but rather than pay for years of premiums and deductibles, short-term care provides benefits for 12 months or less. It can be used to cover gaps in Medicare coverage or as an alternative to long-term care in an interim while other options can be explored.
Short-term care can be an excellent solution to your clients. When chronic illness or disability strikes, the cost of care can add up to thousands of dollars fast. According to longtermcare.gov, national average costs are $6,844 monthly for a semi-private room in a nursing home, $3,628 monthly for care in an assisted living facility and $68 daily for services in an adult day health care center. Short-term care can help alleviate these costs at varying rates. Some pay around $250 per day towards the expenses incurred at these facilities. While long-term care insurance premiums are on the rise, short-term care insurance can range from $105 for a 65-year-old to $141 for some who’s 70 (example from Guarantee Trust Life). Short-term care also supplements what Medicare pays (if it does) while LTC insurance does not.
So how does it work? Help your client pick a benefit amount (typically $50-$300 per day) and the length of time they’d like to receive that benefit. Most policies go into effect right away granted the client’s answers to a set of health questions are accepted. Most LTC insurance policies have a 90-day deductible that must be paid before they can collect benefits.
Short-term care insurance is a great addition to an independent agent’s portfolio. You may have clients that have a need for assisted living who cannot afford long-term care insurance. For short-term care product options, contact one of our market experts at AmeriLife Marketing Group at 800-531-1411.