Episode: Short-Term Care Insurance

Information regarding short-term care insurance from the American Association for Long Term Care Insurance. It offers opportunities for people who have been declined for LTCi or those looking for a lower cost option.

Video Transcription

Hi, my name is Jesse Slome. I'm director of the American Association for Longterm Care Insurance and the National Advisory Center for Short Term Care Information. Thanks for watching this video, which is going to focus on longterm care planning when health, age, or cost is an issue. Now, our organizations do not sell insurance, we educate and we advocate for it. So after watching this video, if you have questions, please speak to the insurance professional that sent you the link, or if you're not working with one and want to be connected with an expert in the field, please call our organizations, the number's on your screen.

Maybe you're watching this video because you've all ready taken the time to apply or inquire about longterm care insurance, only to find out that you can't health qualify, or you've all ready been declined. And we'll talk about solutions when those two things have happened. The fact of the matter is that anywhere from one in four to one in two people who take the time to apply for longterm care insurance are declined by the insurance company. There's a whole host of reasons. This is the top five.Maybe you're watching this video because you've all ready taken the time to apply or inquire about longterm care insurance, only to find out that you can't health qualify, or you've all ready been declined. And we'll talk about solutions when those two things have happened. The fact of the matter is that anywhere from one in four to one in two people who take the time to apply for longterm care insurance are declined by the insurance company. There's a whole host of reasons. This is the top five.

Often it's a matter of height and weight, or existing health conditions, or a combination of medications that you're taking that are keeping you healthy, but that the insurance company looks at and says those could cause a problem or a major claim down the road. The good news is, is there are options available for you. Or, maybe you looked into longterm care insurance or you read one of the many articles that appear in literally every magazine or newspaper and you're left with the impression, which is a true one, that longterm care insurance is expensive. Now, not everyone can afford to pay 200, 300, $400 a month. The fact of the matter is, is not everyone needs that much longterm care insurance. This is a real fact, 49% of all longterm care insurance claims, that means people who have a policy and then go on claim, those claims last one year or less. Where's all this leading to? Again, a potential solution that's affordable and might get you just the amount of coverage that really is suitable. 

Here's fact number three that most people are not aware of. Traditional longterm care insurance policies, the new one's, tax qualified ones, have a definition in them. It's for the 90-day deductible and about 94% of all people who buy longterm care insurance policies select a 90-day elimination period or deductible period. The policy will read that your policy will only pay benefits if you are expected to need help for at least 90 days with two or more activities of daily living. So if you're diagnosed with a condition and somebody says, "Well, you'll probably only need help for 20 or 30 days," your policy will not pay you benefits. Now, the reason that this is written into policy is because these policies are designed to pay for longterm care needs, not for short-term care ones. Most people don't think about this until basically they have a need for care. But short-term conditions like fractures, mild strokes, even many hospital stays, after many hospital stays, you are not going to be certified to need care for at least 90 days or more. Medicare may pay for some of these short-term conditions, but as you'll see in a second, not always. 

Up to now, I've been talking about longterm care insurance. I want to switch gears and talk about Medicare, because if you're on Medicare, here's a fact that you may not know and that you need to. The rules of Medicare continuously change. Why? Because the government needs to incent the organizations that provide health care services to manage their costs. So watch this NBC after you're done, a little segment on what's happening. If you go into a hospital, even though you're being treated and you think you are in the hospital for treatment that you're receiving, if the hospital codes you as being in for observation status, that changes all the potential that you have for getting Medicare covered benefits following your stay. Now this is happening with increased frequency and it could impact you. Again, what we're going to talk about in a second is a solution that will cover these types of treatments if you need them. 

The concept I want you to learn a little bit more about is called short-term care insurance protection. Sometimes you'll see it called recovery care. We kind of refer to it as longterm care lite. Why do I say that? Because longterm care lite policies provide up to one year of benefits. And if you think back to what we said earlier for about half of the people, whoever need longterm care insurance benefits, 49% need care for a year or less. 

What are some of the benefits of these policies? Well, generally they require simplified health underwriting. It's much easier to qualify for these policies than it is for a traditional longterm care insurance policy. One of the pluses, especially if you're a single woman, is longterm care policies now can charge single women much more than single men, sometimes 20, 30 40% more. These policies use unisex pricing, so a single woman pays the same as a single man. Traditional longterm care insurance policies often stop at age 75. These policies can be issued up to age 79, and we're going to talk about, some will go even beyond that. 

I spoke earlier about the 90-day deductible that precludes many people who think they would qualify for benefits from a traditional policy. These policies offer the option of a zero-day deductible, so that provides you with fast access to the benefits when you need care. Now the particular policy that I'm going to refer to in a second is one from a company called Medico Insurance. It's an A rated carrier. And again, we're not paid by a company, we don't favor one or the other, but I think this policy has some unique features that make it interesting to you. 

A short-term care policy may cover the same types of care that you would have covered under a traditional LTC policy. So you're staying in nursing home, assisted living, home health care, eligibility is similar to LTC insurance but not exactly the same. These policies do not require the 90-day certification. And that's an important part a for your consideration. These policies offer deductibles, they will range. So in this particular case, this policy offers you a choice, a zero-day elimination period, a 15 day, or a 30 day. They typically will offer a range of maximum benefits. So you can choose 120 days, 240 days, or 360 days, which is basically a year.

This is the key factor that most people need to think about. And you can hit pause and read the application. So basically these policies ask far fewer healthcare questions, and as long as you can answer no to all of them, you are well on your way to being approved. Now this particular policy will even accept you if you've been declined by a traditional longterm care insurance policy. And that is a very important thing for many people to keep in mind. 

So again, this presentation was intended to be a general overview of the topic. Obviously I want to urge you to get more information from the agent who shared this video. Or if you're not working with an agent, call our organization and we'll be glad to hook you up with one. Our phone number is area code (818) 597-3205 and as always, read the brochures carefully. Ask a lot of questions. Thanks again for watching.

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