I’m often surprised how many people are shocked to learn that Medicare and Supplemental Insurance does not cover Long-Term care costs. When referring to Long Term Care, I’m addressing care in the following:
- Independent Living
- Assisted Living
- Memory Care (Dementia)
- Skilled Nursing
- CCRC (Continuing Care Retirement Communities)
Let me address the confusion. Medicare and Supplemental Insurance will only cover medications, physical therapy, speech therapy and occupational therapy in a community setting (depending on the plan you have selected). Medicare and Supplemental Insurance will not cover the costs of living in a Long-Term Care Community, nor will it cover the care level expenses.
So, you may ask, how in the world can I or my family member afford $5,000-$8,000+ a month? The answer to that question is this, you either have assets available to cover the expense, you purchased Long-Term Care Insurance, or you can apply for the Aid & Attendance Benefit through the VA (for Veteran’s only). Keep in mind that Long-Term Care Insurance policies have criteria that you have to meet as well as the Veteran’s Aid & Attendance Benefit. Aid & Attendance will not cover the total expense of Long-Term Care either, so you will still be looking at several thousands of dollars out of pocket.
Let’s dive a little deeper into this topic. A common response is this, “Well I’ll just have to apply for Medicaid.” It may seem simple in your mind, but it’s really not. States have very specific criteria that you must meet to qualify for Medicaid. Most importantly, nearly all communities that have Medicaid licensed beds, now require (yes, they require) you to spend down your private funds for typically 12-18 months before you can convert to a Medicaid licensed bed. Gone are the days when you could walk in off the street and move in immediately with Medicaid being your primary payor source. In all honesty, you should really tour the Medicaid communities out there before you or your family member decide to move in to one. There’s an obvious difference as I’m sure many of you would expect.
There are other clever ways to pay for Long-Term Care, by extracting funds out of your Life Insurance Policy. The most important point to this article is to be prepared. Educate yourself and talk it over with your family members that are aging.
Author: Stephanie Merritt, Owner, NC Senior Living Solutions