According to MetLife, the average cost of a private room at a nursing home in the United States in 2009 was $219 a day, or $79,935 per year. Many people cannot afford to pay the cost of either long-term or short-term care out-of-pocket for themselves or for loved ones. Insurance companies, therefore, offer both long-term and short-term policies to cover stays in nursing homes.
Short-term care insurance will cover the costs of a nursing home for a limited period of time. The exact coverage period will vary by policy, but is generally between 30 days and one year. Since short-term policies only offer coverage for a limited period of time, premiums are generally lower than long-term care policies. Short-term policies allow you time to make arrangements for long-term care.
Medicare and Medicaid
Medicare and Medicaid may provide short-term assistance for elderly people who meet certain conditions. If you qualify for Medicare and Medicaid, you may also qualify to participate in the Program of All-Inclusive Care for the Elderly. This short-term care insurance allows most patients to continue to live in their current living situation, and receive care on an outpatient basis. This provides an alternative to institutionalization. The PACE program has additional qualification requirements. You must be at least 55, live in a PACE service area, pass a medical screening and currently live in a community setting safely.
Health insurance policies typically limit hospital stays. After you have exceeded your policy's hospital stay maximum, you will have to pay out-of-pocket to continue to receive care. Short-term care policies can sometimes cover this gap. Insurance companies sell short-term care polices to a pool that includes healthy policyholders. Because the group as a whole includes healthy individuals, the insurance company does not expect a high number of claims. This in turn, reduces the premium for all individuals purchasing short-term care policies.
Accidents and medical emergencies can happen at any time. Unexpected events can result in extended hospitalization. Short-term care policies help provide peace of mind when you require extended hospitalization or rehabilitation. These policies typically allow you to receive care in specialized facilities that will treat your specific medical and rehabilitation needs. Many short-term policies also cover in-home care in specific situations.
- Medicare: Nursing Homes; March 2008
- LGE Insurance Services: Short Term Care
- Metlife: Market Survey of Long-Term Care Costs; October 2009
- "Health Insurance"; Michael A. Morrisey; 2007
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