Long Term Care

Will Medicare Pay For Your Long Term Care

So now you know that Long Term Care is expensive. And that the chances of needing it are high. The next question everyone asks themselves is, "Don't I already have coverage for this?"

Medicare's Coverage

There is still a good portion of the population that believe that their Medicare or MedSup policy is going to cover their long term care costs. But the circumstances in which Medicare will cover these costs is extremely limited.

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After a hospitalization of at least three days and three nights, Medicare will cover a portion of the cost of care in skilled nursing facility for up to 100 days. And they are serious about the rules. Spend 3 day and 2 nights and you'll see just how serious they are. If the care you are receiving is considered custodial (and 85% of nursing home care is) rather than skilled medical care, then your stay is not covered. No matter what, after 100 days, Medicare stops paying and it's up to you.

Similarly, Medicare will cover medically necessary home health visits by skilled medical workers, e.g. occupational or speech therapists. However, again Medicare does not cover "custodial care" and typically you must be showing improvement, i.e. demonstrating that the care is rehabilitative.

So on day 101, many peoples thoughts naturally turn to Medicaid...

Medicaid (MediCal in Caifornia)

Medicaid is a State and Federal medical welfare program that is for the poor and indigent. Unlike Medicare, Medicaid will pay for both skilled and custodial care, but in most cases it is limited to care in a nursing home.

To qualify for Medicaid, an individual must have limited income and few assets. Medicaid eligibility rules are complicated, and different states apply different rules. While each state determines eligibility for Medicaid under its own rules, in general the person receiving such services can have no more than $2,000 in personal assets (certain assets such as a home, its contents, and one car are exempt) and can keep only about $30 per month in income for personal needs. Everything else goes to the state to pay for the care provided, and that includes any pension and/or Social Security income.

The spouse of someone on Medicaid can remain in the family home and keep around $82,000 in other assets (varies from state to state) and a monthly income of about $2,000.

One of the many disadvantages of relying on Medicaid is that you will be limited to which facility you can go to. There are only a limited number of Medicaid beds available in a nursing home, provided they take Medicaid at all. And while we don't want to make sweeping generalizations, Medicaid typically pays about half of the "market rate" for nursing care. As a result, there is a tendency for these facilities to have overworked and underpaid staff. All in all, it remains the option of last resort.

So if Medicare only pays for a very limited portion of Long Term Care costs and Medicaid only pays for those who are impoverished what is left? Well, you can pay or the insurance company can pay.

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