Planning for Long Term Care

No one really wants to think about the fact that perhaps someday he or she may be in need of long-term care services. This includes medical and non-medical care (non-skilled personal care assistance) for people who have a chronic illness or disability. As Americans are living longer, the need for long-term care is on the rise. At least 70 percent of the people over 65 will need long-term care services at some point. Medicare and most health insurance plans, including Medigap (Medicare Supplement Insurance), do not provide the entire answer, as Medicare was never intended to be a “long-term care” benefit.

Medicare services are based on medical necessity and are usually short-term (less than an hour in length) and “intermittent” (meaning they are not provided on a daily basis) and do not cover non-medical care or what is sometimes called “custodial care.”

The term “long-term care” can also be a little confusing as it does not refer only to care provided in a nursing home. Long-term care can also be provided at home, in the community, in an assisted living community and in a nursing home. The need for long-term care does not have to be based on medical reason, but can be based on the need for services related to the declining abilities of individuals due to aging, injury or birth anomalies.

Paying for Long-term Care

There are several ways that the cost of long-term care can be financed, including:

• Personal Resources: You can use your savings to pay for long-term care. Some insurance companies will also let you use your life insurance policy to pay for long-term care. A reverse mortgage on your home and current place of residence is another way individuals have supplemented monthly income to pay for long-term care in the home.
• Medicaid:  Medicaid is a joint federal and state program that pays for certain health services for people with limited income and resources. If you qualify, you may be able to get help for nursing home care or other related costs.
• Home and Community-Based Services:  These services are available to individuals who may not meet the income and asset limits to qualify for Medicaid, but still have a lower income that would make paying for long-term services financially taxing. The intent of these services is to help you with the cost of services, particularly non-medical care, that enable you to stay in your home instead of moving to a nursing home. Examples of these services include homemaker services, personal care, and respite care.  Many of these services are managed by a local Area Agency on Aging.
• Veterans Benefits:  The Department of Veteran Affairs (VA) may provide long-term care for war veterans with 90 days or more of active duty or to their spouses. These benefits can be more than $1900 a month for some individuals, but it should be mentioned that the application process can be cumbersome and long. The individual applying must qualify both medically and financially. For more information, call the VA at (800) 837-1000 or visit www.va.gov.
• Programs of ALL-inclusive Care for the Elderly (PACE):  PACE is a Medicare and Medicaid program offered in many states that allows people who otherwise need nursing home level of care to remain in the community. PACE services differ from home and community-based services in that the participating individuals may need more medical care and supervision.
• Long-Term Care Insurance:  Is a private insurance that individuals purchase that can help pay for many types of long-term care, including both skilled and non-skilled (custodial) care. Long-term care insurance can vary widely. Some policies may cover only nursing home care. Others may include coverage for a range of services like adult day care, assisted living, medical equipment and informal home care. Most will have a requirement that there be at least one deficit in activities of daily living (ADLs) in order for the policy to pay a benefit to the owner. Your current or former federal employer or union may offer long-term care insurance. Current and retired federal employees, active and retired members of the uniformed services, and their qualified relatives can apply for coverage under the Federal Long-term Care Insurance Program. If you have questions, call the Federal Long-term Care Insurance Program at (800) 582-3337. TTY users should call (800) 843-3557.