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Informations
How to Pay for Care
Mention long-term care and most people envision the recipient as an older person in their later years. However, the need for long-term care can arise when you least expect it, as the result of an accident or sudden onset illness or disease. 37% of long-term care recipients are under 65 years old. Regardless of the cause, when you or someone you care about requires long-term care, it’s important to know the options when it comes to finding the care you need, where and how you choose to receive it.
Personal Resource
Self Funding
Do you have a healthy amount of money saved up for retirement or other future needs? If you can spare it, that money may be a good choice to cover long-term care costs for you or a loved one. 63% of clients used their retirement and savings funds to pay for care.
Family and Friends Funding
Asking loved ones for help with long-term care can be a bonding experience for all involved, but it is also can take a toll physically, emotionally, and financially. Over time, the stress and expense that come along with it can have wide-reaching effects on everyone in the family.
Insurance
There are several types of insurance designed to aid in the reimbursement of long-term care expenses. Long-term care insurance, life insurance with a chronic illness and long-term care riders, and annuities can either pay for aging-related expenses or provide a series of regular payments that can be used for any reason, including health-related charges.
LTCI
Long Term Care Insurance (LTCI) can be used to reimburse policyholders for long-term care expenses administered in your home or at an assisted living facility or nursing home. LTCI is issued as either an individual policy or you can purchase coverage through some employers that offer group plans.
Some life insurance policies have built-in benefits that can help pay for long-term care expenses or similar types of expenses. These hybrid models may have a chronic illness rider or long-term care rider that is designed to accelerate the life insurance death benefit to cover long-term care or chronic illness needs while the policyholder is still alive.
Annuities
The two most common types of annuities are Immediate Annuities and Deferred Annuities. Within those two categories, annuities can come with many different features. With an Immediate Annuity, the contract owner funds the annuity with a single premium to fund the annuity and in turn, the insurance company promises to make guaranteed payments for a set period (for example, 5 or 10 years), for life, or periodlife with a set period of time (for example, if it was a life and 10-year payment, if the death of the annuitant were to occur in year 5, the annuity would continue to pay out the guaranteed payments for 5 more years to the beneficiary).
To find out your eligibility insurance requirements, please contact your insurance provider for more information.
Public Programs
Medicare and Medicaid may be familiar terms, but many people don’t know exactly what they fund, how long, and whom. The most important thing to know about both is that they have physical and/or financial qualifications to determine if you are eligible for benefits. Those who do qualify to receive benefits are limited in terms of coverage and choice for care facilities.
Medicare: The Facts
Medicare is the federal health insurance program designed primarily for people aged 65 and older. Adults with certain permanent disabilities or medical conditions may qualify for coverage at a younger age.
Medicare Part A is hospital insurance that covers portions of a hospital bill for inpatient hospital care, hospice care, and limited time in a skilled nursing home facility. Deductibles, coinsurance, and copayments will generally need to be paid even if Medicare covers the service.
Medicare does not pay for in-home care services.
Medicare will pay for services once the following conditions are met:
- You had a recent prior hospital stay of at least three days.
- You are admitted to a Medicare-certified nursing facility within 30 days of your prior hospital stay
- (not all facilities are Medicare-certified).
- You need skilled care such as physical therapy or skilled nursing services.
- If you meet ALL of these conditions, Medicare will pay 100% of your costs for the first 20 days. For days 21-100, you pay your expenses up to $176 per day and Medicare pays any balance. After 100 days, you are fully responsible for the entire cost of your care for each day you remain in a skilled nursing facility. Visit https://www.medicare.gov/
88% of the cost of nursing home care following hospitalization falls on you and your family.
Medicaid: The Facts
Medicaid is a joint federal and state public assistance program for financing health care for low-income people. It pays for health care services for those with low incomes or very high medical bills relative to income and assets. It is the largest public payer of long-term care services.
Medicaid pays for certain health services and nursing home care for people with low incomes and limited assets. Eligibility is usually based on income and personal financial resources. So, to qualify for Medicaid you may have to spend down your assets. It's important to know that Medicaid benefits may vary by state. To find out the eligibility requirements in your state, find out the eligibility requirements in your state visit: Medicaid Eligibility by State (State Activity)