Long-term Care Planning for Seniors

Planning for Long-term Care: Who Will Pay for It?

In this blog we’re going to talk about something that will affect 70% of people in the United States — long-term care. We’re all going to be affected by this either directly or indirectly through a family member. Since long-term care is inevitable for most of us, what are your options to pay for it? Below we will discuss the differences between Medicare and Medicaid, and tell you how you can plan for long-term care.

The Difference Between Medicare and Medicaid

First let’s distinguish between Medicare and Medicaid. Simply put, Medicare is for a limited amount of time and Medicaid is for a longer span of care. Medicare is basically Federal insurance. It pays for skilled nursing care which could include physical therapy, occupational therapy, and other skilled services. Skilled nursing care is not a form of long-term care. So Medicare is not for long-term care. Medicaid is for long-term care.

Medicare helps to pay for complex care and rehab for people who have had a stroke, hip replacement, knee replacement, heart attack, or some other kind of extensive medical treatment. Medicare is not for permanent residents of a skilled nursing facility. It is only for those who are recovering from some surgery or condition and expect to return home at some point.

Medicare generally pays for 100% of your skilled nursing care for the first 20 days. Thereafter you’ll pay a co-insurance of approximately 20% of your skilled nursing care. So after the first 20 days, Medicare will pay 80% and you’ll pay 20%. But what happens when you are no longer a short-term patient and become a long term patient? That’s when Medicare stops paying. The big number here to remember is 100 days. That is when you are no longer considered short-term and are now considered long-term.

Examples of a “long-term” patient would include someone suffering from Alzheimers, dementia, or Parkinson’s. We also see situations where patients in a skilled nursing facility are taking physical therapy in a short-term situation and they just give up. When this happens, they are no longer a short-term patient and they become a long-term patient. As such, their care is no longer paid by Medicare.

Who Pays for Continuing Care at Home?

What happens if you go through all the rehab at the skilled nursing facility and you’re discharged home, but you still need some continuing care? Is Medicare going to pay for this? The simple answer is yes. Medicare would pay for that continuing care. But you would still be responsible for that 20% co-insurance amount since you’re over the 20 days where Medicare pays 100%.

In these cases we look at what are called “referral services.” The discharge planner from the hospital or skilled nursing facility would have a discharge process where they would look at providing home care through different businesses around town. This home care could be physical therapy, occupational therapy, hygiene, or medication assistance. That would be paid by Medicare but there are rules that apply. The home care has to be medically necessary and it has to be a part of your discharge plan.

There is no limit on how much Medicare pays for your medically necessary outpatient therapy services in a calendar year. As long as you pay that 20% Medicare deductible, you can continue to receive these outpatient therapy services for as long as you need them. A supplemental insurance policy is also very helpful in these cases and I would highly recommend having one of these if you expect to need continuing outpatient therapy at home.

Medicare will also pay for a social worker if you don’t have any relatives that can help with coordinating your care. All of this is done through the discharge planner at the hospital or skilled nursing facility. You have to meet the specific requirements to qualify for Medicare assistance in these cases. Most importantly, your doctor has to determine that you need skilled nursing care at home.

Who Will Pay for Your Long-Term Care?

Since Medicare will not pay for long-term care, who will pay for it? You may have a long-term care insurance policy that will help pay for long-term care costs, but those policies will usually not cover 100% of skilled nursing costs. And lately long-term care insurance has become almost cost prohibitive with premiums averaging $400 to $500 per month.

If you don’t have a long-term care insurance policy, you’ll be using your assets to pay for the nursing home care. Here in Georgia, the average cost of a nursing home is approximately $8,300 per month. At that rate, you can see how your assets could quickly be spent down to nothing. Also, what if you have a spouse at home? How are you going to pay for $8,300 a month of nursing home care and still have enough to take care of your spouse at home?

This is where we are able to help. We can help you qualify for Medicaid so that you don’t have to spend down your life savings to pay for nursing home care. This also ensures that your spouse at home still has enough income to live comfortably and to pay monthly household expenses.

Medicaid has very strict asset and income limits. The current income limit is $2,523 per month. If your Social Security payments are $2,600 a month, you would not qualify. But fear not. We can still help get you qualified even if your income is over the $2,523 per month limit. Your house is considered an exempt asset, so we don’t have to worry about that part of the equation. We do have to ensure that your spouse at home has enough income to pay for the taxes, upkeep, and maintenance on that house.

What about your IRA or 401k? We recently had a client who was told by the nursing home that they had to spend down their retirement account below $2,000 so the mother could qualify for nursing home care. This is simply not true. In the State of Georgia, retirement accounts are considered exempt assets. The required minimum distributions (RMDs) coming from those accounts are counted as income, but the asset itself is not counted against you. There is a lot of misinformation out there, so be sure to always check with an experienced elder law attorney if you’re questioning anything the nursing home is telling you.

Who Pays for Assisted Living and Memory Care Stays?

If you don’t necessarily need a nursing home, does Medicaid pay for independent living, memory care, or assisted living? It doesn’t. For all of these, you must privately pay. You may live in an assisted living facility where all your meals, laundry, etc., are handled by the facility, but Medicaid will not pay for it. These types of facilities are usually in the neighborhood of $3,500 per month, so that can get quite expensive.

Memory care is similar to an assisted living facility, but with a wing that is locked down. This is primarily for people with Alzheimers and dementia. The staff members there are trained to work with people who have memory-related conditions. They also provide round-the-clock care with medication management, hygiene, etc. In the State of Georgia, Medicaid does not pay for this. You must privately pay.

Contact Us So We Can Help!

Long-term care planning is something we don’t want to consider, but something that definitely needs our attention. We spend much more time planning vacations than we do planning our long-term care. As mentioned earlier, 70% of us will be affected by this. This means you need to start planning now.

Having a plan will ensure that your assets and your spouse are protected. We create customized plans every single day for people wanting to protect their assets from the nursing home. We’ll help you qualify for Medicaid so that they will pay for your long-term care.

If you have any questions or need any assistance, please don’t hesitate to complete this form or give us a call at (229) 226-8183. You can also send us an email to [email protected].

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