Long Term Care
Planning for the payment of long term care costs will depend upon
the individual's health, financial, and living arrangements. The plan should
permit flexibility for possible adjustments to the plan as the individual's
finances and health change. The options include Medicare, long term care
insurance, private payment, and Medicaid. The various types of living
arrangements available range from home care to assisted living to nursing homes
to continuing care retirement communities.
- Medicare
The federal Medicare program has been and continues to be the most significant health care insurance program for the elderly. Coverage is provided for services under either Part A (hospitalization) or Part B (professional charges). An individual is eligible for Medicare Part A benefits if he or she qualifies for Social Security retirement benefits, Social Security disability benefits (two years after the onset of disability) or is a kidney dialysis patient. Part A coverage includes hospitalization, home care, hospice and a maximum of 100 days of skilled or rehabilitative nursing homecare per benefit period. It is rare that a patient, even on facing permanent institutionalization in a nursing home will receive the full 100 skilled nursing or rehabilitative care benefit. Additionally, there is a co-pay for days 21 through 100 which is not covered by some Medicare supplemental or "Medigap" policies (supplementary health insurance coverage). Medicare home care is only available to those confined to home and who require skilled care (the benefit is limited to a maximum of 37 1/2 hours per week).
- Long Term Care Insurance
Long term care insurance provides coverage for individuals with chronic illnesses or disabilities who need assistance with activities of daily living, intermediate or skilled nursing care. Policies provide coverage for a wide range of in-home and institutional services ranging from in home care to adult day care to assisted living to continuing care retirement communities to nursing home care.
- Private Pay
One way to eliminate concerns regarding future cost of living expenses, regardless of dramatic changes in one's health, is to possess sufficient assets and income. Studies abound with statistics showing that 40-60 percent of us can expect to spend some time in a long term care facility such as a nursing home with an average monthly fee fora semi-private room of $5,000 per month. Realistically, any plan to finance long term care should include provisions for paying privately fora certain length of time and for uncovered medical care. However, few families have the resources to self-insure.
- Medicaid Long Term Care
The Medicaid Long Term Care program was designed to provide health insurance coverage for long term care to individuals and families with limited income and resources. In order to be eligible for benefits an individual must meet three eligibility requirements: technical, financial, and medical. Technical eligibility consists of citizenship, residency and being either aged, blind or disabled. For medical eligibility, the applicant must require, at minimum, health related services on a regular basis above the level of room and board. Financial eligibility rules differ depending on whether there is a spouse living in the community. Medicaid planning can enable individuals to make financial decisions that conform to the Medicaid law while providing substantial asset and income protection for spouses of institutionalized individuals. Proper planning can also aid in asset protection for individual applicants as well.
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