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| The costs of long-term care vary greatly depending on where you live and the type of care you receive. Many people think that home care usually costs less than nursing home care. However, skilled care at home can cost just as much, if not more than nursing home care. It depends on what type of care you need in your home, and for how many hours per day. | ||||||
Here
are Four Options To Pay For Your Long-Term Care |
|
Please Note: The chart on nursing home costs includes semi-private and private rooms. This is a matter of personal preference and should be considered when choosing the daily benefit on your long-term care policy.
What will the future cost of long-term care be?
When planning for your future long-term care expenses it is important to
not only note what the cost of care is today, but what it could be in the
future. The projected growth rate for long-term care is 5.8% according to
"Health Spending Projections Through 2013," Office of the Actuary, Centers
for Medicare and Medicaid Services, Health Affairs- 2/11/2004.
This means that in 20 years the cost of long-term care could triple. So if you are 60 years old today and you live in an area where the annual cost of care is $61,116 now, the cost in 20 years could be as much as $183,348. Imagine what your future expenses could be if you live in a higher cost area!
Besides the normal daily rate a nursing home will charge you or the hourly rate a home care agency will charge you, there are always going to be ancillary costs you should plan for. In a nursing home, additional expenses could be diapers, laundry, medications, and other incidentals. In your home, there are additional expenses like safety devices (i.e. grab bars near the bathroom and toilet, and maybe a ramp for the stairs).
More than 50 million family caregivers in this country provide care for a chronically ill or aging family member or friend. It is estimated that family caregivers provide some $196 million in services to America's overburdened health care system.
2004 National Family Caregivers Association and the National Alliance for Caregiving
Financial Costs
If you rely on family members to take care of you, it is important to consider
the financial costs they may incur. They may be more than willing to take
care of you, but may be unaware there may be a financial cost to them. The
financial cost to them could be very high. If they currently work, they
may need to work fewer hours, or even give up their jobs altogether.
Physical Costs
Providing long-term care is hard work. Family members may become exhausted
from the long hours of care giving. If you had a stroke and could not bear
your own weight it could be very difficult, if not impossible, for a family
member to lift you in and out of bed, especially if your caregiver were
your spouse and you were both in your 80's! If you have Alzheimer's and require
24-hour care, it can be very exhausting for a family member to stay up all
night and during the day. Your family caregiver couldn't do that for too
many days in a row!
Emotional Costs
The emotional toll caregivers experience is another cost your loved ones
may pay in providing care to you. If you are relying on a family member
to take care of you, it is important to understand the type of care you
may be asking them to provide. You may be thinking that the extent of the
care is helping you in and out of bed, assisting you with meal preparation,
or driving you to the doctor. But, what if you need more care than that?
Will it be possible for the friend or family member to handle more extensive
care?
Unfortunately, private health insurance, Medicare, and Medicaid are not realistic options to rely on to pay for your
long-term care. This section addresses who pays for long-term care and what
the limitations and disadvantages are in relying on those programs.
of Long-Term Care Expenditures
Medicare
It is very important for you to be aware of Medicare's limits. Medicare may be one of the most misunderstood government programs in defining what is actually covered for long-term care services. Medicare is a federal program administered by the Center for Medicare and Medicaid. It is available to most people at age 65 or those with end stage renal disease.
According to the chart shown above, you can see that Medicare paid only a small percentage of the nation's long-term care bill. The reason Medicare doesn't pay for more long-term care is that most long-term care is not skilled care and that is what Medicare primarily pays for. There are two parts to Medicare, Part A and Part B. As it relates to long-term care, Medicare Part A will pay for skilled nursing care, home health care (very limited), and hospice.
Medicare Skilled Nursing Facilities
Relying on Medicare to pay for your long-term care is not an adequate solution
because it only has the potential to pay for up to 100 days in a skilled nursing
facility. The requirement is that you have to be receiving skilled care on a
daily basis at least five days a week, after having had a three-day hospital
stay prior to entering the nursing home. Most people do not qualify for the
entire 100 days because they don't meet Medicare's criteria. *There are additional
criteria as well.
Medicare will pay for the first 20 days in full, and will pay for all costs except a co-pay in 2009 of $133.50 for the next 80 days. However, the average number of days paid by Medicare is only 23 days according to the Health Care Financing Administration, 1998.
It is important to point out that if you only needed custodial care you would not receive any Medicare benefits.
| Example: If you had Alzheimer's disease and needed supervision, or if you needed help with your activities of daily living due to old age, these conditions would not qualify for Medicare benefits. |
Medicare Home Health Care Benefits
Many people mistakenly think Medicare will pay for an unlimited amount of home
care. Medicare will not pay for full-time long-term care. Medicare will only
pay for a limited number of visits. The chart above shows you the percentages
of the nation's long-term care bill that covers home health care benefits. There
are many requirements to get home health care benefits under Medicare. For example,
you must be homebound and must need skilled care for fewer than five days per
week. In any case, Medicare generally does not adequately cover long-term care.
| For more information on Medicare
you can call 1-800-Medicare (1-800-633-4227) to speak to a Medicare Customer
Representative or visit Medicare on the Web |
| |
| If Medicare doesn't pay,
won't my Medicare Supplement pay for my long-term care? Generally, Medicare supplements only pay co-payments of Medicare. If Medicare will not pay for your care, then your Medicare supplement probably will not pay either. I have an HMO, so doesn't
that pay for my long-term care? |
If you do not qualify for Medicare or Medicaid to pay for your long-term care, then you have to pay long term care costs out of your own pocket. This may mean depleting your savings, cashing in your CDs, selling stocks and bonds, or even using cash value in your life insurance policies. Unfortunately, for many people it does not take long before they deplete their hard-earned savings and end up qualifying for Medicaid.
Medicaid (called "Medi-Cal" in California and "MassHealth" in
Massachusetts) is a joint federal-state program that provides care in a
nursing home for those who qualify. To qualify for Medicaid, an
individual must have limited income and few assets. Medicaid
eligibility rules are complicated, and different states apply different
rules. Each state operates its own Medicaid program, consistent with
federal law.
Medicaid pays for a majority of our nation's nursing home care
costs. Unlike Medicare, Medicaid will pay for both skilled and
custodial care, but in most cases is limited to nursing facility care.
Medicaid pays for physician-approved hospital stays, medical care,
prescription drugs, and skilled nursing home care. (There are
exceptions in certain states.)
There are several disadvantages in relying on Medicaid. First,
the choice of nursing homes is very limited. Second, in most states
Medicaid does not pay for home care*. Home is usually where people want
to stay so applying for Medicaid can require receiving your care in a
nursing home. *States have the right to apply for home and community-based
services (HCBS) waivers. These waivers make funds available to provide
custodial, as well as skilled care in the community. HCBS Waiver
patients, like Medicaid patients, will still be limited to receiving
care from those providers who are willing to accept less compensation
for their services than they receive from their private pay patients .
A few of the states that have applied for these waivers include
Washington, Arizona and New York. Income Limits However, if the Medicaid nursing-home patient is married, the "community
spouse" is allowed to keep a certain amount of income, which can vary
between $1,750.00 and $2,739.00 (in 2009). This varies by state. If the "community
spouse" has income that comes in their name alone, they can keep that income
and it does not have to be applied to the nursing-home patients long-term care
costs.
Generally speaking, if the nursing-home patient has enough income to pay for
their own care they will not qualify for Medicaid even if they meet the asset
requirements below. If a couple has enough income to provide the "community
spouse" with the minimum income requirements and pay for the nursing home
spouse's long-term care, they will not qualify for Medicaid even if they meet
the asset requirements. Asset Limits Transferring Your Assets to Qualify for Medicaid
The 1993 budget bill (OBRA '93) required the Medicaid program to "look
back" 36 months prior to the application for Medicaid's nursing home benefit.
The Deficit Reduction Act (DRA '05) now requires Medicaid
to "look back" 60 months for all transfers. This includes transfers
made to or from certain kinds of trusts. If a transfer is found during the "look back" period a penalty
period is applied. The penalty period is determined by dividing the amount transferred
by what Medicaid determines to be the average private pay cost of a nursing
home in your state. Estate Recovery for Medicaid Benefits The percentage of long-term care paid for by private insurance includes both
care paid for by individual and group long-term care insurance. It also includes
care paid for by health insurance. For example, short-term rehabilitation after
a car accident.
There are other funds that can pay for long-term care, but they all have strict
criteria and guidelines that must be met. An example would be the Veteran's
Administration. The Veteran's health care benefits include medically necessary
hospital and nursing home care and some outpatient care. The VA prioritizes
veterans that qualify for care according to several categories. The first priority
of veterans for receiving care is those who have a service-connected disability.
If you do not have a service-connected disability the veteran stays at the bottom
of the priority list. There are income and asset requirements as well to be
met.
The income of a Medicaid nursing-home patient--usually Social Security and pension
income--must generally be used to pay the costs of long-term care. The patient
may keep a "personal-needs allowance" which averages $30-$60 per month.
(This varies by state.)
In order to be eligible for Medicaid benefits the nursing-home resident must
spend down to $2,022 in "countable" assets. The spouse of a nursing-home
resident - called the "community spouse" is limited to
one half of the couple's joint assets up to $109,560 (in 2009) in "countable"
assets. (This does not include the car, house and a few other personal items.)
This figure changes each year to reflect inflation. In addition, the community
spouse may keep the first $21,912 (in 2009), even if that is more than half
of the couple's assets. This figure is higher in some states. There are
a few states which automatically allow the at-home spouse to keep the maximum
of $109,560 (in 2009) if the couple has that much in assets.
Many people think a solution to qualify for Medicaid is to falsely impoverish
themselves by giving their assets away. When applying for Medicaid, the federal
government requires a "look back" period where they look to see
if you have transferred your assets for less than fair market value (i.e. to
children or others).
Federal Law requires states to recover what was spent for the care at the
death of the second spouse. State rules and practices for estate recovery vary
significantly. Some states are stricter than others. In some states, placing
a lien on your home is part of the estate recovery act.
To learn more about your eligibility benefits as a veteran, contact your local Department of Veterans Affairs Regional Office, or write to:
Veteran's Benefits Department
Paralyzed Veterans of America
801 18th Street N.W.
Washington, D.C. 20006
Or call 800-424-8200
