Paying for Long-Term Care  

By Lori Leu, Erin Peirce, and Lauren Olson

Long-term care in the United States is currently one of the most uncertain issues faced by seniors. As technology evolves, Americans have the ability to live longer, while the cost of long-term care continues to rise. Ongoing political battles on both the federal and state levels continually result in new legislation that affects publically-funded government programs, which are the only means many seniors have to pay for health care and long-term care. While no one can predict the future, becoming educated about available public benefits and payment of long-term care can help ensure you are protected.

One of the greatest myths is that Medicare will pay for all health care needs of seniors, including long-term care: “I want to stay at home as long as possible and when I get sick, Medicare will pay for it. And, if that runs out, I’ll just be a ward of the State.” This belief about Medicare and the “State” handling long-term care is mistaken and prevents many seniors from pursuing the planning assistance that they need.

In general, Medicare is health insurance for people who are age 65 and older or have certain disability qualifications, and who paid Medicare taxes through payroll deductions for a sufficient period of time (or who qualify through a working spouse or parent). Contrary to popular belief, Medicare does not pay for assisted living or custodial care in a skilled nursing facility. At most, traditional Medicare and a Medicare Supplement (MediGap) policy will cover 100 days of rehabilitation in a skilled nursing facility. Medicare Advantage plans typically cover only 20 days of rehabilitation. The next step requires affirmative action on the part of the patient, or the patient’s agent, to secure payment for ongoing long-term care.

There are essentially three ways to pay for long-term care:

  • Private Pay – Some people are fortunate to have the ability to pay for their own long-term care, which currently ranges from $3,000 – $7,000/month or more in the Dallas-Fort Worth area.
  • Long-Term Care Insurance – Long-term care insurance policies are improving and are becoming the option of choice for funding long-term care for many people. Newer policies allow for coverage of care provided in all types of settings, including home health, assisted living, and skilled nursing, thus providing some independence and flexibility. The cost of long-term care policies can rise quickly for people who are older, those with existing health problems, and those who desire broader benefits. Therefore, the earlier you apply and the more you shop around, the better your policy may meet your needs.
  • Government Benefits
  • VA Pension – There are varying levels of veterans’ benefits, depending on your needs, including basic, housebound, and aid & attendance benefits. These benefits are limited to veterans (and their surviving spouses) who served a 90-day continuous period in the military, at least one day of which occurred during a wartime period, and who were honorably discharged. The program is needs-based, so income and assets must be evaluated to determine eligibility.
  • Medicaid – This encompasses federally funded, state-managed programs that are needs-based, with strict limitations on income and assets, but with exceptions that are important to consider. Eligibility requirements and services covered vary widely from state to state, with Texas routinely ranking as one of the worst states for Medicaid coverage. Providing advice on Medicaid eligibility includes the interpretation of statutes and administrative rules and constitutes the practice of law under the rules of the Texas Health & Human Services Commission. Only attorneys are legally allowed to provide assistance with Medicaid eligibility. While there are several non-attorney individuals and companies who try to provide this assistance, Medicaid applicants should beware. These persons are operating illegally, often charge more than attorneys, and are within the realm of those who are preying on seniors for their own financial gain.

How will you pay for your and your loved one’s healthcare and long-term care needs that lie ahead? For a better understanding of your funding options for long-term care and to find an elder law attorney in your area go to www.naela.org.

Lori Leu, Erin Peirce, and Lauren Olson are Elder Law attorneys with Lori A. Leu & Associates in Plano, Texas. They can be reached at 972-996-2540.

Lori Leu, Erin Peirce, and Lauren Olson are Elder Law attorneys with Lori A. Leu & Associates in the North Dallas area. They can be reached at 972-996-2540.