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Treatment costs in the United States are becoming increasingly expensive. Hospitalization costs, prescription drugs, and assisted living costs are just a few of the many areas of health care and long-term care that are experiencing price increases. And about half of U.S. adults say they find it difficult to pay for health care. KFF.
One way to manage these costs is through insurance. While premiums are still expensive and there may be gaps in coverage, you can reduce the risk of facing astronomical costs that force you to make difficult decisions.
However, it is important to understand that health insurance is different from: Long-term care insurance. Additionally, if you want financial protection for both regular medical expenses and costs associated with ongoing care, such as living in a nursing home, you may need both types of insurance.
For more information, explore your long-term care insurance options here.
What is the difference between long-term care insurance and health insurance?
To understand the difference between nursing care insurance and health insurance, it is important to first clarify what nursing care means.
“Long-term care includes a variety of services designed to meet a person's health and personal care needs when they are no longer able to perform daily activities on their own.” . National Institute on Aging.
Therefore, long-term care insurance typically helps cover the costs associated with people who need assistance with activities of daily living (ADLs), such as bathing and eating. Health insurance, on the other hand, covers things like doctor's visits and prescription drugs for treatment of illness or injury.
Dr. Cha Hu, co-founder and CEO of insurtech company The Helper Bees, says long-term care insurance can also cover things like “meal preparation, housework, transportation, etc.”
Health insurance usually doesn't cover this kind of thing, especially in the long term.
“While some of these services are covered by Medicare in certain situations and for short periods of time and by Medicaid for those who qualify, traditional health insurance plans do not provide this type of non-medical coverage. “The timing, method, and amount of coverage also vary depending on the recipient. Health insurance and long-term care insurance,” he added.
Explore long-term care insurance options here to see how they can help you or a loved one.
Why do I need long-term care insurance?
Health insurance often does not cover support for ADLs and related needs; Long-term care insurance It is often necessary to protect against potentially significant costs. Insurance companies say a home health aide costs about $5,000 a month, and a semi-private room in a nursing home facility costs about $8,000 a month. Genworth.
You may consider the risks involved, but long term care coverage If it's low, most people will need some form of long-term care. In fact, people who are 65 years old have a nearly 70% chance of needing long-term care at some point in their lives. Community life administrationpart of the U.S. Department of Health and Human Services.
“Long-term care insurance provides asset protection when you start to lose capacity,” says Allen Haney, co-founder and president of The Haney Company, an insurance agency and financial services company.
Costs that are initially manageable can snowball as a disease such as Alzheimer's disease or an injury progresses.
“Long-term care is something that continues to increase in cost because each time an individual loses an additional ability, first they are unable to drive, then they are unable to dress themselves, then they are unable to eat, and the cost goes up,” Haney said. say.
How do I enroll in long-term care insurance?
you can Join nursing care insurance Through several different routes. One option is to go through an insurance agent. Nursing care insurance provider. You can also connect insurance policies from different insurance companies through independent insurance agents. Your financial advisor or related professional may be able to refer you to a long-term care insurance provider.
You may also receive nursing care insurance. Combined use with life insurance.
“Currently, very few insurance companies offer standalone long-term care insurance products. They are commonly combined with life insurance, known as hybrid insurance. If you currently have retirement insurance or life insurance, Talk to your agent.’ If you qualify or have a long-term care rider to help pay for long-term care costs, talk to your agent,” says Dr. Hu.
When purchasing long-term care insurance, be sure to check the insurance details carefully and consider the balance between cost and coverage. “It can be very confusing,” Haney said. “Think about what's best for you and make sure you can afford it and use it when you need it.”
Start exploring your long-term care insurance options online here.
How much does nursing care insurance cost?
Nursing care insurance costs can vary significantly based on type This will depend on factors such as the type of insurance you choose and your age.
For example, based on 2023 data, for a policy with level benefits starting at $165,000, the average annual premium for a 55-year-old single man in the “Select” health rate class (which is higher than “Preferred”) is $900. It becomes.from American Long Term Care Insurance Association (AALTCI).
Average annual premiums for a 65-year-old man start at $1,700 for a level benefit of $165,000, but a policy with benefits increasing by 5% annually would cost $4,200 a year.
Women will face even higher costs. A 65-year-old woman pays an average of $2,700 for a $165,000 level benefit, but a policy that increases benefits by 5% a year would cost $7,225 a year.
The cost of long-term care insurance continues to rise with age, so Haney recommends starting your insurance search. Around 40 years oldinstead of waiting until you're close to retirement.
conclusion
Health insurance is an important part of addressing general medical needs, but it typically does not cover long-term treatment. And given that the majority of older people will need long-term care at some point, Long-term care insurance This is an effective way to protect against this risk.
However, insurance policies can be expensive and vary widely, so it's important to compare policies. Consider talking to a trusted professional who can explain your options, including traditional and long-term care insurance. Hybrid nursing care insurance.
