How Long-Term Care Insurance Differs from Health Insurance

While health insurance helps patients cover health care provider visits and prescription medications for managing medical conditions and illnesses, long-term care insurance can help patients access help with bathing, eating, and other activities of daily living. Experts clarified the difference in a CBS News MoneyWatch article.

“While some of these services are covered by Medicare for specific situations and short durations and Medicaid for those who qualify, traditional health insurance plans do not offer this type of nonmedical coverage,” Char Hu, PhD, cofounder and CEO of The Helper Bees, an InsurTech company, said in the report. “When, how, and the amount of coverage also varies between health insurance and long-term care insurance.”

In short, long-term care insurance can protect against substantial costs as older adults age. The article cited two estimates from long-term care insurer Genworth: monthly costs currently run about $5000 for a home health aide and $8000 for a semiprivate room in a nursing home. “What long-term care insurance provides is asset protection as you begin to lose" function, Allen Haney, cofounder and president of the The Haney Company, told CBS News.

Because such asset protection can be pricey and increase in cost with age, Haney advises interested clients to start shopping for long-term care coverage around age 40. According to the article, a single, 55-year-old man would pay an average annual premium of $900 for $165,000 in level benefits. At age 65, the average annual premium would start at $1700 for the same benefits. Policies with growing benefits cost significantly more, as do policies for women.

“It can be very confusing,” Haney advised CBS News. “Consider what would be the best for you, making sure that you can both afford it and that it works for you when you need it.”

Reference

Safane J. Long-term care insurance vs. health insurance: what’s the difference? CBS News. January 4, 2024. Accessed February 23, 2024. https://www.cbsnews.com/news/long-term-care-insurance-vs-health-insurance-whats-the-difference