Health Insurance and Long-Term Care Insurance Comparison

Health Insurance Policy

“Long term care can be covered by my health insurance; therefore, I don’t need to purchase a long term care insurance policy.” This is one of the wrong notions about long term care financing that needs to be cleared out.

Though both involved in a person’s well-being, it is important to note that health and long term care insurance are two completely different policies. This means that their coverage, though related, is not the same.

If you are anticipating long term care and believe that your health insurance policy will cover the cost, then you are mistaken.

Health Insurance

Health insurance is one of the policies that are necessary to have because at some point, all of us will require medical attention or treatment. However, health insurance doesn’t generally cover long term care.

Health insurance works by covering the medical and surgical expenses of its policyholder. Apart from this, its benefits can include health screenings and tests such as annual physical exams, EKG, pap smears, x-rays or blood tests. Furthermore, it can also pay for hospital stay and prescription drugs.

In some cases, health insurance may include coverage for nursing home stay, but note that it is considered an added feature and coverage can be limited as opposed to a traditional long term care insurance plan. More so, this can add up to the overall cost of the policy.

Private health insurance coverage can be acquired individually or through a group plan, typically sponsored by the employer. Currently, 58% of Americans are covered with private health insurance as per the Centers for Disease Control (CDC). Meanwhile, those with low-income can turn to government programs such as Medicare and Medicaid for health care assistance.

Long Term Care Insurance

Meanwhile, long term care insurance is specifically designed to provide coverage for care expenses. It pays for care administered in the home or in facilities such as nursing homes, assisted living communities or adult day care centers.

Long term care insurance covers care expenses for people who need assistance in basic activities in order to cope with day to day living. Some individuals require it due to a chronic condition such as dementia, while others need it simply because they have grown frail.

Long term care insurance is more on the custodial variety, as opposed to health insurance that is inclined on the medical aspect. In effect, health insurance pays for the medical treatment, while long term care is responsible for the care required during rehabilitation or coping with the illness or simply, living with the infirmity of old age.

Though usually part of a retirement strategy, long term care insurance is not just for the elderly. Currently, it is estimated that 40% of individuals between the ages of 18-64 will require long term care, according to the U.S. Department of Health and Human Services. Meanwhile, 70% of those aging 65 and beyond is expected to need long term care.

Having Both is Essential

The importance of health insurance seems like a no-brainer. All of us will require a visit to the doctor at one point, thus, most knew better and are already covered for that future need. However, the importance of long term care insurance is not yet sinking in for most people. Still, the majority is clouded with the wrong judgment that health insurance can pay for care. Again, we stress that long term care is not covered by a health insurance policy. If it is, long term care insurance wouldn’t be birthed in the first place.

With the aging baby boomers and longer life spans, the majority will live up to their elderly years and will have a higher chance of being in a disabled state. Therefore, there will be a higher need for long term care. Should such time come, having an insurance policy in place gives you a sense of security that your care expenses will be covered.

More so, keep in mind that care costs are on the rise. By the time you need care, prices could be double or triple from what they are now. For instance, Genworth’s Cost of Survey found that in a span of 5 years, the annual median cost of nursing home stay have skyrocketed by 24%, from $67,527 to $83,950. The inclining rate of care costs can easily deplete your savings should you opt to pay out of pocket.

Health and long term care insurance have the same goal—and that is to maintain the policyholder’s well-being. However, both of them cater to two completely different needs—needs that can arise at any time and that can have serious implications on the finances and quality of life if unprepared for.

Feel free to contact us if you have questions regarding health insurance plans and other senior insurance products. We also welcome insurance brokers and insurance agencies who need help in their business and careers. You can reach us here:

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