By Lori A. Leu, Erin W. Peirce, Lauren E. Olson, and Laura J. Chavero
Long-term care in the United States is currently one of the most uncertain issues faced by seniors. Several factors contribute to this uncertainty: Americans are living longer than ever, the cost of long-term care continues to rise, and ongoing political battles continually result in new legislation affecting government-funded programs. Today, the oldest Baby Boomers are already in their 70s, and by 2030, one in five Americans will be older than 65. Considering that some studies show that 36% of Baby Boomers plan to rely only on Social Security as their retirement income, these programs may be the only means they will have to pay for health care and long-term care. While no one can predict the future, becoming educated about the reality of public benefits and long-term care costs can help ensure you and your loved ones will be protected.
One of the greatest myths is that Medicare will pay for all our health care needs: “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 misconception about Medicare and the “State” handling long-term care prevents many seniors from pursuing the planning assistance that they need.
In general, Medicare is health insurance for people aged 65 and older or who meet 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 cover much less. Thus, the patient must 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 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 – The levels of veterans’ benefits vary depending on an individual’s needs. 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. 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 long-term care needs that lie ahead? Making smart decisions now ensures that when the time comes, you will be able to afford the quality and level of care you need. 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, Lauren Olson, and Laura Chavero are Elder Law attorneys with Leu & Peirce, PLLC in Plano, Texas. They can be reached at 972-996-2540.