| Discuss Ways to Pay for Long-Term Care The price tag for long-term care can be astronomical, beyond the
resources of most families. At best, Medicare pays only a fraction of these costs.
Extended nursing home stays can easily cost $4,000 a month, although fees vary widely.
Although home care is generally far cheaper (in part because it does not include housing
and food costs, which are factored into nursing homes’ rates), it too can be very
expensive to patients and their families. Costs may depend on the level of care needed,
the number of hours of care per week, and where your parents live.
Before the need for long-term care
becomes a reality, you and your parents should consider very carefully how to pay for it:
through Medicaid if they qualify, with private long-term care insurance, or out-of-pocket.
Often, the decision is about money. Here are some fundamentals to help guide this tough
decision.
Be Aware of Medicare's Limits
While Medicare covers some home health,
skilled nursing, and hospice care, it is not a long-term care program. For example,
although Medicare covers relatively short-term, medically necessary home health care, it
does not pay for custodial care services such as cleaning or cooking at home. Nor does the
program pay for prolonged care in a nursing home.
Home Health Care
Home health care is covered for homebound people who need the services of a skilled nurse
or a skilled physical, speech, or occupational therapist. In these cases, Medicare will
also cover home health aide services to help with bathing, toileting, feeding, other
personal care, and medical social services. Home health benefits are only covered if your
parents meet certain requirements: the visits must be prescribed by a doctor, and your
parents must need intermittent or part-time skilled nursing care or therapy services and
generally must be homebound. There is no copayment for home health services under
Medicare, and no limit to the number of covered visits, as long as your parents continue
to meet these criteria.
Skilled Nursing Facility Care
Medicare covers up to 100 days of nursing home care, but only in limited situations.
To qualify for this benefit, your parents must need daily skilled care (seven days a week
of nursing care or five days a week of rehabilitative care). Moreover, they must have been
hospitalized for at least three days within the 30 days preceding admission to the skilled
nursing facility, or Medicare will not pay for their care. In addition, a copayment ($96
in 1999) is required of every patient for the 21st through the 100th day of their care.
Medical Equipment
Medicare also helps cover some durable medical equipment for use at home, whether it
is rented or purchased. These items include walkers, canes, and commodes that will assist
your parents with their long-term care needs.
Hospice Care
Hospice care is available under Medicare for people with advanced illness and who are
expected to live six months or less. It concentrates on improving quality of life, not on
curing the condition. Medicare's hospice benefit covers a range of services, including
care from doctors, nurses, therapists, and home health aides. It also covers services that
Medicare usually does not, including some prescription drugs, respite care, and continuous
nursing services for medical emergencies.
Hospice care is designed to help with
pain management and other symptoms, so that you and your parents can make the most of the
time that remains. In addition, it can provide emotional and spiritual support to you,
your parents, and other family members.
Medicaid Coverage of Long-Term Care
Medicaid is the country's largest public
payer for long-term care. If your parents qualify for Medicaid, it will pay for nursing
home care, prescription drugs, and other costs that Medicare does not cover. Medicaid may
also pay for some long-term care services provided at home.
There is more than one way your parents
can qualify for Medicaid. If they receive Supplemental Security Income (SSI), they are
likely to qualify for Medicaid automatically. If they don't have SSI, but have extremely
limited income and assets, they may be able to qualify for Medicaid anyway. The exact
income eligibility levels for Medicaid vary by state, so check Medicaid rules where your
parents live. Medicaid also looks at assets such as savings accounts when determining
eligibility, although assets generally don't include homes, cars, household furnishings,
or burial plots.
If their income is higher than the
state's Medicaid eligibility level, your parents may still be eligible for Medicaid
coverage. In several states, people can qualify for Medicaid after spending their income
and assets on nursing home and other health care expenses. This is called Medicaid
"spend down."
Some people enter a nursing home as
private-pay patients but become eligible for Medicaid over time because of the high cost
of such care. Most states let nursing home residents covered by Medicaid keep between
$1,600 and $2,000 in assets and an income of about $30 per month.
Medicaid rules vary by state. If you or
your parents have questions about Medicaid, contact the state Medicaid office or long-term
care ombudsman in your area.
Long-Term Care Insurance
Long-term care insurance covers some of
the costs of long-term care and may help your parents preserve a portion of their assets.
Today, more than 400 insurance companies sell private long-term care insurance that covers
nursing home and home care, but only a small share of people on Medicare have a long-term
care policy.
While long-term care insurance can limit
costs for some people, it is not a good option for everyone. Such insurance is expensive,
and the older you are when you buy it, the higher the cost of the monthly premiums.
Policies purchased at age 65 average $1,800 a year for four years of comprehensive
coverage; at 79, they average $5,600 a year. And if your folks have Alzheimer's or other
serious health problems, they may not be able to buy a policy at any price.
To Buy or Not to Buy?
A major reason for purchasing long-term care insurance is to avoid depleting life
savings with a prolonged nursing home stay and to preserve savings and other assets for
children and grandchildren. Another is to help offset the cost of long-term care for
couples whose assets are limited, but whose income is fairly high (over $35,000 a year).
But, if your parents already qualify for Medicaid or would quickly spend down their assets
to qualify, long-term care insurance might not be sensible. Nor is it a prudent investment
if they can't afford to pay the premium for the rest of their lives. Even if they can,
long-term care insurance may not be a wise choice if they can pay for their care
out-of-pocket.
Do Your Long-Term Care Insurance Homework
No two long-term care insurance policies
are alike. Before your parents decide to buy a policy, consider these issues:
 Find out
what the policy covers
Does it provide for care in a nursing home, in your parents' home, or in a community
setting? Some policies will pay cash once your folks meet eligibility requirements and
will allow them to spend the money for care in the location of their choice. Others will
pay for care only in a specifically defined location. Be sure the policy covers the type
of care your parents want.
Be sure
you and your parents can afford the premiums
Check to see if, and by how much, the premiums will rise over time, and consider whether
you and your parents can afford premium hikes in the future. Premiums are also affected by
the number of years covered under the policy. Four years of coverage is a good compromise
between lifetime coverage (which can be quite expensive) and the risk of less coverage.
Consider this: people between age 65 and 94 who enter a nursing home stay, on average, two
and a half years, while 90% stay less than four years.
Examine
the costs of elimination periods
Many long-term care insurance policies have elimination periods, which are waiting periods
that act as deductibles. Your parents must pay for their own care during that time. The
longer the elimination period, the lower the premium. Whatever they decide, be sure your
parents can afford the out-of-pocket costs they will incur before their policy begins
paying.
Consider
the level of coverage you are buying
Choose a policy with a benefit that will cover a good portion of the daily cost of
services your parents may need. Bear in mind that the cost of care will rise with
inflation.
Your parents need coverage that keeps up
with the rising cost of long-term care. Otherwise, a policy they buy today to cover 80% of
these costs may cover only 40% later on, when they need such care. Inflation protection is
often sold as a "rider" to long-term care products.
Compare
how companies determine eligibility for benefits
Long-term care policies have different ways of determining if and when someone is eligible
for benefits. For example, under some plans, policyholders qualify for coverage when they
cannot perform activities of daily living on their own. These may include eating, walking,
moving from a bed to a chair, dressing, bathing, and using the toilet. Make sure bathing
is mentioned specifically, since people with long-term care needs are likelier to require
help with this task than with any other activity. Read the fine print before purchasing a
long-term care plan.
 Paying
for Long-Term Care Yourself
Because Medicare's coverage is limited,
and many don't qualify for Medicaid or are unable to afford a long-term care policy, often
elderly people and their families must tap into savings to pay for care. You and your
parents need to think about how much care may cost over an extended period of time, and as
your parents become increasingly frail.
The cost of institutional care depends
heavily on the amount of time it is used. Find out about nursing home care costs in your
parents’ area. Then, calculate how much money they would need for a four-year stay.
If they can set aside enough to cover four years of residential care, they should consider
simply paying for it themselves. But realize that actual costs can't be predicted. If your
parents suffer from Alzheimer's or other forms of dementia, they may need care for many
more years.
Home care often costs much less than
residential care. Since people with long-term care needs often wish to continue living in
their own homes, you may want to research the costs of home and community-based services
in your area. Such services, along with home adaptations, can help your parents stay in
their own home.
Don't wait until your parents need
long-term care to begin discussing it. Talking about their preferences and needs now can
help you plan how to pay for their care. Depending on the decisions you and your parents
make together, purchasing a long-term care insurance policy, relying on savings, or using
Medicaid may be right for you. |
