So, let’s assume that you are 69 or 70 years old. You always intended to buy long term care insurance but figure now that ship has sailed. You are too old, you think, or maybe it will be too expensive now. You have a few minor health issues and do not know whether you will meet the more rigorous requirements for insurance for long term care. Is that the end of your options? It might not be and there is a relatively new insurance product that might fill your needs. Referred to as “short term care insurance” or “recovery care,” this type of insurance policy could be an answer. Remember always, however, that each policy has its own terms. An insurance policy is a contract. Make certain you know what you are agreeing to before signing up.
This, in general terms, is what short term care or recovery care is about. First, as its name implies, it does not cover a lengthy stay for care. Policies generally cover up to a year and could be less depending on the term you chose. However, they have multiple uses. For instance, you could begin to receive benefits sooner. Many long term care insurance policies have elimination periods (the time before you begin to receive the benefit) of 90 days more or less depending on your choice. Short term care can begin as early as 0 days or up to 30 days and can pay in addition to Medicare. If you believe you need more help earlier than Medicare provides, it may provide that additional help.
If you read one of my prior columns on the subject, you know that long term care insurance policies now typically charge more for women than for men because women, actuarially tend to live longer than men. Under short term recovery care women and men can both pay the same premium.
Studies indicate that about 40-50% of claims for long term care insurance only last for one year. This could be because the recipient either recovers within that time, moves to hospice care if the condition is very serious, or does not survive. With this in mind, one year might be all that is needed to cover your period of illness. Also, depending on the policy, the single year of coverage might be extended where there is one incident of illness and then you are not treated for that illness for a period of 180 days. In other words, the “clock” could be reset and you might receive additional time. Be sure to consult the individual policy for details if this is the case.
Generally speaking, the requirement for coverage is the same as for long term care insurance, that is inability to perform two activities of daily living (eating, dressing, bathing, continence, walking, transference) without substantial assistance or severe cognitive impairment.
As an elder law attorney, the most significant benefit I see for clients is a period of up to one year during which they can reshuffle the deck. Many of the clients I see are dealing with the shock of recovery care after hospitalization for stroke, heart conditions, Parkinson’s and other serious illnesses or after a serious fall or accident. After leaving the hospital and either returning home or receiving a period of care in a nursing home, the shock of the first bill for long term care cannot be overestimated. If there is a fund to help clients and their spouses and adult children to cushion the blow and allow time to plan for this new reality, this can go a long way toward relieving the strain experienced by them and it is more likely that the decisions made would be consistent with what the client and his or her family desires.
In the first year, a client and his or her family could decide whether to sell the house, whether to apply for nursing care, whether to move to assisted living/personal care or whether to move in with adult children or seek other housing. The first year is critical to decision making and short term recovery care might give the leeway to develop a more reasoned plan.
Recovery care can cover care at home, in a nursing home or in assisted living/personal care. It is best to deal with a licensed agent with experience in insurance products of this type. If it is a fit it might fill a hole in a much needed gap in care insurance.
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.