Do Not Forget About Long Term Care

With the open enrollment period coming up in a few days for Medicare, there are a lot of options available and a lot of information to sift through.  There are provisions in Medicare and Medicare Supplements for many healthcare procedures and supplies.  However, one area that Medicare and Medicaid only pay for a minimal part of is long term care.

Medicare and Medicaid pay for some long-term care Unfortunately, like any government program, there are very stringent guidelines and conditions that allow a person to receive payment.

Medicare, which people receive at age 65 or if they become permanently disabled before the age of 65,  only has 100 days of coverage for skilled nursing home care. Medicare pays first 20 days at 100%. For the next 80 days you are required to pay up to $128 a day (as of 2008). After 100 days, Medicare pays nothing and you are expected to pay the entire costs out of your pocket.

A difficult issue is that most people don’t need skilled care.  They need custodial care. This means that they can’t take care of themselves because of a physical problem, old age, or a brain impairment such as Alzheimer’s. These issues are not covered by Medicare or Medicare Supplements because they are not considered skilled care issues. In addition to paying only for skilled care, the criteria and guidelines state that you must have spent at least three days in the hospital before going to a nursing home facility for Medicare to pay for your stay.

Medicaid doesn’t do much more. It will pay for your nursing home stay, but only after you are practically destitute. You are expected to dissolve all stocks, bonds, retirement funds, or bank accounts in order to help pay the bill. If you live alone, they can take your house and other assets. Some people try to avoid this by putting all their assets into a living trust. The government has a “look-back” period designed to prevent people from transferring money into a trust and then going into a nursing home within 5 years after transferring funds into the trust.  It isn’t a bad idea to look into a living trust while you are healthy, as, not only will it help with the matter of nursing homes and long term care, but it will also – in most cases – avoid many taxes and probate for the beneficiaries.

Long-Term Care Insurance is called LTC for short. LTC policies pay for many types of care for a long term including nursing homes, assisted living facilities. It may also cover home care, custodial care, intermediate care and skilled care plus care needed for cognitive impairment like Alzheimer’s. They pay a certain amount per day as well after you have fulfilled a period of time (called an elimination period) before they start making the payments.  There is also a time limit on how long they will pay the benefit, although some policies will pay for life.

It is important to research LTC insurance policies before you need them.  For one thing, they will cost less if you buy them at the youngest age possible.  Though Medicare and Medicaid will help, it is not a bad idea to add some extra coverage so that you don’t get left with a hefty bill or losing your assets if you ever need Long Term Care.