What is Short-term Recovery Care Insurance?
Short-Term Recovery Care insurance, also known as convalescent care insurance or short-term nursing facility insurance which helps manage the cost of temporary stays in a nursing facility. For some, Short-term Recovery Care can be an affordable alternative to long-term care insurance. It is also a great way to cover the first ninety days of nursing home confinement that Long Term Care insurance typically requires consumers to pay out-of-pocket.
Anyone who has had an incapacitating illness like a heart attack or a serious injury that renders them temporarily unable to care for themselves can use short-term recovery care insurance. Also, coverage for short-term recovery tends to fall through the cracks of most managed care and long-term care insurance plans; because 42.8% of all patients admitted to nursing care facilities stay for less than a year.
Medicare Part A requires at least a three-day hospital confinement before they will cover the first 20 days of nursing facility care and only covers skilled care not intermediate or custodial. After 20 days, Medicare requires you to cover the per day coinsurance out of your own pocket for the next 80 days and then coverage stops for that confinement. Each year the coinsurance amount goes up.
A traditional Long Term Care Insurance (LTCI) policy should be the first choice for those who can afford and qualify for one. But for those who don’t, a Short Term Recovery Care (STRC) policy is an excellent choice.
Some highlights of Short-term Recovery Care:
- Simplified underwriting
- Unisex rates
- Competitive Cost of Living riders
- Can be used to cover 90-day elimination on existing LTCI policies
Features and Benefits:
Besides paying a daily fixed benefit during your confinement, there are several additional benefits which vary between insurance company offerings; examples are as follows:
Coverage for Nursing Facility Care
If you are in need of skilled, intermediate or custodial care in a nursing facility; you can now have peace of mind. The Daily Benefit will help pay for expenses incurred, up to the maximum number of days of coverage you choose.
Coverage for Assisted Living Facility Care
If you need assistance that does not require 24 hour care, but you are still in need of services provided in an institutional setting, a percentage of the Daily Benefit you selected can help pay for expenses in an assisted living facility for the maximum number of days selected.
Lifetime Elimination Period
You may have the option to select either the Elimination Period. The Elimination Period is the number of days you receive services which would qualify for reimbursement under your certificate before benefits begin. During the Elimination Period you are responsible for all expenses incurred. Once your Elimination Period has been satisfied, benefits will be paid in accordance with the certificate provisions. Once you satisfy the Elimination Period, you may never have to satisfy it again.
Lifetime Maximum Benefit
A Lifetime Maximum Benefit is available for a specified number of days. After the Elimination Period, you will receive benefits for each day of care up to your maximum benefit as shown in the Schedule of Benefits. If your maximum benefit is fully exhausted coverage will be terminated.
Restoration of Benefits
Should your stay require less than your maximum benefit and you may qualify for a Restoration of Benefits as defined in the policy, full benefits will be restored up to a specified number of times your maximum benefit during your lifetime.
Bed Reservation Benefit
If you are hospitalized while receiving benefits in a nursing facility or assisted living facility, the Company will continue to pay a benefit for a charge made to reserve your accommodations in the facility for up to specified number of days per calendar year.
Optional Inflation Protection Riders
Compound Inflation Protection – On the first anniversary date of this Rider and on each subsequent Certificate anniversary date, we will automatically increase the Maximum Daily Benefit Amounts (for nursing facility care and assisted living facility care) listed in the Certificate’s schedule of benefits. The automatic annual increase will be equal to a specified percentage of the Maximum Daily Benefit in effect on the most recent anniversary.
Simple Inflation Protection
On the first anniversary date of this Rider and on each subsequent Certificate anniversary date, the carrier will automatically increase the Maximum Daily Benefit Amounts (for nursing facility care and assisted living facility care) listed in the Certificate’s Schedule of Benefits. The automatic annual increase will be equal a specified percentage of the initial Maximum Daily Benefit Amounts shown in the Schedule of Benefits on the date of issue of your Certificate. Annual increases will not be compounded. After a specified number of years, the amount will remain level at a specified percentage of the original amount issued.
Waiver of Premium
You won’t need to worry about making your premium payments if you are confined to a covered facility, such as a nursing or assisted living facility. Your premium payments will be waived during your stay. Premium payments must resume once you are discharged from the facility.
You can receive a discount when you and your spouse apply for coverage and are both approved.
Coverage for Pre-existing Conditions
Pre-existing conditions disclosed on the application will be covered immediately.
Home Care Rider
The benefit is available:
- Up to a specified weekly maximum
- with choice of covered period of weeks
- with a lifetime maximum equal to a specified number of covered weeks
This rider pays a benefit for each week you receive a specified number of professional home care service visits, provided you cannot perform a specified number of ADLs (activities of daily living) or you have cognitive impairment.
Other riders include:
Accident and Sickness Hospitalization rider
Critical Accident Benefit rider
Ambulance Benefit rider
Dental and Vision Benefit rider
Return of Premium rider
Short-term Recovery Insurance is currently not available in Washington, but can be sold in Oregon. Contact me to learn about insurance coverage that fits your needs and budget. There is no obligation and I am happy to research a wide-range of options for you.