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Understanding Short-Term Care Insurance

Image shows a form, pen and stethoscope on a tabletop. The top page of the document reads, "Short Term Health Insurance."

Short-term care encompasses services that people usually need when they are unable to take care of daily activities on their own, including services involving stays in an assisted living facility or skilled nursing home, services offered by home health care aides or even certain prescription medications. Additional recovery time at home – or even additional long-term care – is often necessary after being released from a hospital, and short-term care could be useful in addressing those needs. Paying for these services, however, becomes another question. Although consulting a financial expert might be best to ensure that you have all the information you need, it’s important to get a sense of your options – one of which could be short-term care insurance.

Though many people look to Medicare to cover certain out-of-pocket costs related to short-term care, Medicare can be limited and sometimes has specific requirements that people have to meet first. Short-term care insurance policies may help protect customers from out-of-pocket costs.

Why Get Short-Term Care Insurance?

Short-term care is sometimes known as “recovery care” and related insurance policies usually cover home care, assisted living and nursing homes when the patient can’t take care of themselves.

Increased premiums and more difficult qualifications for long-term care (LTC) insurance, however, mean that more people are turning to short-term care insurance as an option. These policies typically cover services that last 12 months or less. This makes them a possible option for covering gaps in Medicare coverage or covering an elimination period for a long-term care insurance policy you may already have. It also makes them an option to consider if you waited too long to buy long-term care insurance and are now faced with higher costs for that.

How Much Does Short-Term Care Insurance Cost?

Image shows a patient opening the door of their home for a visiting nurse. Short-term care insurance may be able to help cover a cost like this.

Benefits for short-term care insurance are usually offered for up to a year. Coverage may provide customers with 100 to $200 a day to help offset long-term care costs. According to information from the websites and, some examples of costs may include the following:

  • Semi-private room in a nursing home – $225 per day or $6,844 per month
  • Private room in a nursing home – $253 per day or $7,698 per month
  • Care in an assisted living facility (one-bedroom unit) – $119 per day or $3,628 per month
  • Home health aide services – $20.50 per hour
  • Homemaker services – $20 per hour
  • Adult day health care center services – $68 per day

When it comes to paying for the insurance that will cover these costs, according to the American Association for Long-Term Care Insurance (AALTCI), typical premium costs can run about $105 per month for someone age 65 and $141 per month for someone age 70. Unlike many long-term care policies, short-term care policies are not gender-based.

Short-Term Care Insurance vs. Long-Term Care Insurance

Since both short-term and long-term care encompass various services that may be necessary for people who have disabilities or debilitating health conditions, the need for either can arise for anyone at any time. Both can involve assistance with aspects of what’s known as custodial care, which includes help with bathing, using the bathroom, eating, getting dressed and more. These are known as activities of daily living (ADLs) and involve a much wider and personal, daily level of care than other kinds of healthcare a person might receive from a general or specialized medical practitioner.

Companies such as AARP, New York Life, and others provide insurance that typically covers services that don’t fall in the scope of other kinds of health insurance. These services can include the listed above. Some policies also cover services and care related to chronic conditions, certain diseases or impairments from unexpected accidents.

When comparing short-term care insurance to long-term care insurance, the primary difference is duration. This difference creates the basis for the other big way in which they’ll differ – that is, cost. Short-term care policies are available for 12 months or less, but an important note, according to the AALTCI, is that almost half of LTC insurance claims last the same duration. Most short-term care insurance policies have a 0-day deductible or elimination period and a full year of benefits, meaning that you can qualify for benefits without waiting. This is not possible with LTC insurance policies.

It’s also key to note that short-term care policies pay in addition to Medicare, another difference between these and long-term care policies. Furthermore, applications for these are often shorter and have fewer questions, which may be beneficial for anyone who has existing health problems that may disqualify them from being eligible for a LTC insurance policy.

Bottom Line

Image shows a nurse helping someone get up to use a walker after being injured. Short-term care insurance may be able to help cover costs for a service like this.

Affording any kind of insurance policy can be relatively difficult, especially if you don’t have enough saved beforehand. With long-term care insurance, many companies encourage looking into it and paying for a policy as early as possible, before certain health issues could disqualify you from coverage approval. Short-term care insurance could provide a better alternative on shorter notice, as its application process is less involved, it has fewer disqualifications and it can work alongside coverage from Medicare. While it could be a good idea to seek the services of a financial professional to see if short-term care insurance is right for you, it’s also important to contact companies directly to learn more about the different policies that are out there.

Tips for Planning for Extended Medical Care

  • If trying to plan for future care for you or a loved one makes you feel overwhelmed, consider consulting a financial advisor. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • If you’re leaning towards long-term care insurance coverage, the timing of your application can affect what your premiums are, what your elimination period is and more. Check out SmartAsset’s guide for when to apply for LTC insurance to learn more.

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