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How to Insure Your Income: Other Policies Usually Fall Short

Most health insurance policies are designed to provide benefits for immediate doctor, hospital, surgical or emergency medical care. They do not cover other forms of skilled care and do not cover nonmedical care that may be needed on a daily basis.

Some policies may offer optional benefits for nursing home or convalescent home care, but these benefits require prior hospitalization and generally are provided for a short time. These contracts would not cover an extended confinement, and they would not cover a confinement if there were no prior hospitalization.

Existing government programs have many of the same shortcomings as traditional forms of private health care insurance. Many people believe -- wrongly -- that "Medicare will take care of it," if they should ever need nursing home care. Nothing could be further from the truth! The Medicare program provides very little protection against nursing home expenses.

To the extent that Medicare may cover some nursing home care, the benefits are extremely limited. Generally, Medicare pays for all covered services during the first 20 days.

From the 21st through the 100th day, there is an $87 daily copayment (this means Medicare pays only about 10 percent to 15 percent of the cost). After the 100th day, nothing is payable. In short, the patient is still responsible for most of the cost.

Additionally, Medicare will provide these benefits only if the individual is an inpatient in a Medicare-certified skilled nursing facility, and only if the admission follows a period of prior hospitalization. Many nursing homes are not certified by Medicare, and many nursing home confinements do not follow a period of hospitalization.

More significantly, Medicare does not cover custodial care at all (the primary type of care offered in nursing home environments), and it does not cover intermediate care (which is often provided to patients who do not require skilled care).

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