Health Care Insurance vs Long Term Care Insurance

medicare medicaid

Won’t the Affordable Health Care Act Cover this?

I know – the changes in health care reform can be quite bewildering.  And since the law is mandating people have health insurance, it is easy to think, “Well….this long term care insurance stuff should be covered too, right?”  Sorry.  But that is not correct.

There are two broad categories of care:  short term (often called “Recovery Care”) and long term care insurance (sometimes called “custodial care”).  The difference between them is only EVERYTHING when it comes to insurance!

Short term (Recovery) care is paid for by HEALTH INSURANCE.  Health insurance can be coverage thru work, Medicare or Medicaid (if you are over 65) or even coverage bought thru the exchange sponsored by the government via the Affordable Health Care Act.  All of these – really ALL of them – pay for the recovery care window.  So, as long as a person’s medical records say you are “getting better” (the real medical language is “showing clinical evidence of improvement”), then your health insurance is paying all or most of the tab.  This type of care, by the way, is given to you in a hospital or rehab unit.

However…if the therapist at the rehab unit looks at you and says, “Well, you are as good as we can get’cha.  We’re going to release you.  But you can’t be on your own…you still need help”….well, that is the very day that your health insurance stops paying and you have to have some other mechanism to handle the cost of care.

Let’s take the case of a person who has had a stroke or has, at age 92, fallen and broken a hip.  The person’s health insurance (Medicare, work coverage, or coverage from Affordable Care Act) will pay the hospital stay and the rehab time.  But upon release from rehab, if the person still requires someone to help them bathe or dress or any other basic daily activity, then the health insurance is done.  At this point hopefully the person owns a long term care insurance policy that will kick in and pick up some or all of the cost.

If the situation is a slow slide into care such as Parkinson’s or Alzheimer’s, then health insurance won’t pay much at all.  Oh, it may pay for a doctor visit or medications…but it won’t pay for someone to CARE for you.  Again, you would need a long term care insurance policy to cover that expense.

If a person does not own such a policy, s/he will pay for the care out of their own pocket until they are flat broke (usually a net worth of under $2,000).  Then and only then will Medicaid (Welfare) step in and pick up the tab.

So don’t kid yourself….  If you are 35 to 70 years old, you should be looking into a long term care insurance policy to cover the costs of care when you need it.  The Affordable Care Act did many things – but it did not take away the risk of going bankrupt paying for a nursing home (or assisted living facility OR home health care!).


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