Paying for Long-Term Care
The price tag attached to long-term care can be high—especially when care needs extend over a long period of time. Most of all, it is important to be aware of the cost of long-term care and to consider in advance how to cover that cost.
Click here to obtain a rough calculation on how much you might need for long-term care.
Paying for these services can be challenging: private health insurance and disability policies do not cover the majority of long-term care services and government benefits are extremely limited. If they do cover long-term care, it is typically limited to skilled, short-term, medically necessary care.
Congress is weighing proposals to address the cost of long-term services and supports, including a proposal to create a national long-term care insurance program.
Long-term care costs vary based on a number of factors, including the geographic area in which a person lives, the type of setting in which care is provided—for example, home or long-term care residence, the extent of required care and the time period in which care is necessary.
According to a 2011 survey by the MetLife Mature Market Institute, the MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs, the average costs for various long-term care services in the United States are:
- $21/hour for a home health care aide
- $70/per day for adult day services
- $239/day for a private room in a nursing home
- $3,477/month for an assisted living facility
Click here to find out the average cost of care in a specific area.
So how can someone pay for this care? People pay for long-term care in a variety of ways, including:
Individuals and their families might pay for part or all of the costs of long-term care from their own personal income, savings, investments or other funds. Some people sell assets, such as their homes or stock, or take out reverse mortgages to pay for long-term care needs.
Medicare, a program funded by the federal government, only covers the cost of some skilled care in an approved nursing home or in the home in specific situations. Medicare’s skilled nursing facility (SNF) benefit only takes effect if a medical professional says that daily skilled care is necessary after a hospital stay of at least three days and if the care is provided in a Medicare-certified skilled nursing facility.
When these conditions are met:
- Medicare may cover up to 100 days of skilled nursing home care per benefit period.
- After 20 days, beneficiaries must pay a coinsurance fee.
- Beneficiaries currently pay coinsurance for a skilled nursing facility of $133.50 per day for days 21 through 100 each benefit period.
In contrast, Medicare does not cover the costs of care in assisted living facilities. In the home setting, Medicare does not cover homemaker services in the home setting; it only covers home health aides in the home for personal care related to the treatment of an illness or injury if the person is homebound and is receiving skilled care such as nursing or therapy; benefits are for a limited amount of care in any week.
The U.S. Department of Veterans Affairs provides for a range of long-term care benefits for veterans, subject to certain qualifications, specific facilities and co-payments. Click here for more information. Click here for more information.
Medicaid is a joint federal and state-funded program that pays part or all of nursing home care only for individuals that meet certain criteria—mostly those who are low income and have spent most of their assets. Medicaid pays for nearly half of all nursing home care on an aggregate basis, but many people who need long-term care never qualify for Medicaid assistance. Medicaid also pays for some home and community-based services, and for assisted living facilities on a very limited basis.
To qualify for Medicaid, applicants must meet federal and state guidelines for income and assets. Many people start paying for nursing home care out of their own funds and “spend down” their income until they are eligible for Medicaid. Some assets and income can be protected for a spouse who remains at home. In addition, some states have long-term care insurance partnership programs that help individuals with insurance coverage protect assets to meet Medicaid eligibility.
Long-Term Care Insurance
Long-term care insurance is an insurance policy that covers part or all of the costs of long-term care services when a person needs ongoing assistance with day-to-day activities at some point in the future. It can cover the cost of care provided in different types of settings—including someone’s own home, a community setting or a long-term care facility—and by an assortment of providers. Plans vary—in eligibility, coverage, premium costs and payouts.
Like other types of insurance, this is a protection plan for “what if” and reaping the benefits of paying annual premiums may or may not happen; someone may buy long-term care insurance and never need the coverage, while another person may find it worth every premium paid.
For more information about long-term care, connect with the Alzheimer’s Foundation of America’s licensed social workers. Click here or call 866.AFA.8484. Real People. Real Care.