There are basically four ways of paying for LTC services:
1. Self-Insure or Self-pay
Self-Insure means setting aside or having enough money to pay privately for future LTC services, if they become necessary. Remember the cost of care as seen on the interactive map. Much LTC is provided by friends and family. The cost to a family member can take its toll in lost wages, early retirement or cessation of a career.
Medi-Cal is a joint federal-state government program for low income individuals that will provide coverage for long-term care expenses if your income and assets are very low or after you have exhausted almost all of your owned assets. It is an entitlement program based on strict income and asset guidelines. You may be required to spend your own money for care, living expenses and other “allowable” expenses before becoming eligible for Medi-Cal. This is referred to as the “spend-down” period. Even though every state has different eligibility criteria for this government program, assets and income are subject to review in order to determine your eligibility. Many people try to transfer all their assets immediately after it has been determined that they require long-term care assistance; however, this time period will not always meet the “look-back” period criteria. States are increasingly using the laws that are in place to recover moneys owed to Medi-Cal.
Medicare is the federal medical insurance program for people age 65 or older, and disabled persons of any age receiving Social Security benefits 24 months after benefits begin. It was designed to pay some of the costs of certain health care services in order to provide recipients access to a basic level of healthcare. The majority of care provided in the U.S. today in connection with chronic long-term illnesses or conditions is personal or custodial care and may be rehabilitative in some cases. Medicare will generally not pay for personal or custodial care. However, Medicare will cover some long-term care expenses for a short period of time per Medicare benefit period if:
- After a minimum three-day stay in a hospital, not including the day of release, you require a high level of care, as prescribed by a doctor, such as skilled nursing care or rehabilitation services. Medicare pays for the first 20 days of your stay in a skilled Medicare approved nursing facility.
- On days 21 through 99 of your stay, you pay a daily co-pay amount determined yearly by the Centers for Medicare and Medicaid Services (CMS). Medigap policies may cover the daily co-pay amount. You must be improving at a hearty clip to qualify for this continuance of benefits.
- After 100 days, Medicare will pay nothing for these services. The intent of Medigap policies is to provide coverage for Medicare copayments and deductibles. A Medigap policy will not continue paying after the 100 days.
Admission to a nursing home is not enough to qualify for Medicare payment. The level and type of care determines whether short-term Medicare coverage for long-term care will be provided. Medicare does pay for short-term home health care, providing certain guidelines are met.
4. Long-Term Care Insurance
Why purchase Long-Term Care Insurance? This insurance is designed to help pay for or reimburse the cost of covered long-term care services if you need them. It is not the same as medical insurance, which generally provides coverage for doctor visits and hospital stays. Depending on the type of policy and coverage selected, long-term care insurance can provide coverage for long-term care in many settings: your own home, nursing homes, adult day care, and residential care facilities.
- Not connected with or endorsed by the U.S. Government or the Federal Medicare program.