Private Health Insurance and Long Term Care Benefits

Page Reviewed / Updated - May 2017

 

Definition

Private or traditional health insurance refers to a senior’s primary health insurance offered by a private company or through a retired employee’s pension plan. Traditional health insurance does not refer to Medicare or Medicare Supplemental Insurance (Medigap) coverage. Note that while Medigap is a private health insurance plan, it is not considered a primary plan, but a supplemental plan. Also note that long term care insurance is not considered a primary health insurance.

 

Overview

Most private health insurance will pay for short term skilled nursing care costs only.

It is important to recognize that every health insurance plan provides different benefits but generally speaking, private pay, union, COBRA and pension-based health insurance plans follow very closely Medicare’s stance on long term care for seniors.

Most health insurers, like Medicare, will pay for short term skilled nursing care costs only. Home care is also limited to medically necessary, skilled care for short periods of time. Custodial or personal care is almost never covered at home, in adult day care or in assisted living.

Most Americans get health insurance from their employers and lose that coverage when they retire. Therefore, most seniors receive their health insurance from Medicare. Private health insurance, because of limited senior enrollees and limited services covered, plays a very small role in long term care for American seniors.

 

Qualifying

The Affordable Care Act (Obamacare) has dramatically changed the qualification process for purchasing health insurance. Whether the Trump Administration maintains the Affordable Care Act remains to be seen. Previously, factors such as one's age, their health and any pre-existing conditions which formerly would have disqualified the applicant, no longer impact their eligibility.  If purchased through the federal and state-specific health insurance exchanges, all US residents are eligible for insurance.  

 

Benefits

Health insurance is not a solution for paying for long term care for the elderly.

Much of the care required by seniors as they age is non-medical in nature.  Non-medical care refers to assistance with the activities of daily living such as bathing, eating, mobility and personal hygiene and in the case of persons with dementia, supervision.  This type of care, also called personal care or custodial care, is not paid for by any private health insurance.

Payments made by private health insurance companies are typically made directly to the medical providers. Seniors do not receive payout directly unless it is for reimbursement purposes.