older adults eating at a care facility

Using Short-Term Care insurance with Long-Term Care insurance

Study up on these insurance options that can supplement your Medicare coverage

Chances are, even if you’re under the eligibility age of 65, you’re at least familiar with the term “Medicare,” the federal insurance program for seniors. This program is certainly helpful in assisting with the basics:

  • Medicare Part A: Covers some costs for inpatient hospital stays, skilled nursing facilities, hospice care, and home health care.
  • Medicare Part B: Covers some costs for preventive services, certain doctor visits, outpatient care, and medical supplies.
  • Medicare Part D: Covers some costs for prescription drugs, shots, and vaccines.

But even with this coverage, the insured is still on the hook for coinsurance and copays for many services, plus the cost of many forms of extended health care. This is where supplemental policies, such as Short-Term Care insurance and Long-Term Care insurance, may come in handy.

What is Long-Term Care insurance?

Long-Term Care insurance has been available since the 1970s, although it really caught on in the ‘80s and ‘90s as policy options expanded and the potential benefits became clearer. (Kaiser Family Foundation (KFF)’s timeline offers perspective about specific legislation and public/private partnerships that grew the long-term care insurance market and availability.)
Since Medicare typically doesn’t cover long-term care in a nursing home or assisted living facility unless you meet certain requirements, Long-Term Care insurance is a supplemental policy that can help pay for these costs — should the need arise — rather than the bill falling to you or your family members.
An important factor to consider with any Long-Term Care insurance policy is the elimination period, also known as the waiting period or qualifying period. This is a set length of time between when the need for care begins and when the benefit payments kick in. In other words, this is like a deductible — the number of days the insured pays for care before the policy pays. Most often, elimination periods for Long-Term Care insurance are 90 days. Policies with shorter elimination periods generally cost more. If you have enough savings to cover six or more months of care, then you might consider up to a 180-day elimination period.

What is Short-Term Care insurance?

With that elimination period top of mind, it’s a great time to dive into the topic of Short-Term Care insurance. These health plans can cover the cost of care that takes place within the Long-Term Care insurance elimination period. The elimination period for a Short-Term Care insurance plan is often less than that of a Long-Term Care insurance plan, with some options offering an elimination period as short as zero days.
A Short-Term Care insurance policy may also help cover the cost of in-home health care services before long-term care services are needed. These policies are separate from Medicare coverage and can be used to help pay for home health care, assisted living, and nursing home costs, and are usually available for periods up to 12 months. Short-Term Care insurance plans may also have lower premiums and may be easier to apply and qualify for than Long-Term Care insurance plans.

The bottom line

Since these supplemental insurance options offer different benefits and timelines, many individuals choose both for extra protection against the rising cost of health care. Remember, having a plan in place for how to cover the cost of future care can provide peace of mind to you and your loved ones, all of whom will know you’ll be covered for the care needed.

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