Long Term Care Guide

THE HEALTH CARE SYSTEM – HOW MUCH $ IS COVERED.

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Introduction & Funding Options

 
  THE HEALTH CARE SYSTEM
  
  What health insurance (HMO, PPO, Kaiser, BlueCross, etc.), and Medicare covers.
  
 

If you have a change of health requiring medical care your HMO/PPO health insurance and/or Medicare will cover the following regardless of age.



Days 1 to 20 -- 100% of the costs are covered.

Days 21-100 -- you are covered after a co-pay of $110.

After day 100 (or if you stop improving) you pay for care or you apply for Medicaid (welfare health care).
2009 Medicare Rates
$133.50 Skilled nursing facility daily coinsurance amount after the first 20 days
$267.00 Daily cost to beneficiary for hospital days 61 to 90 in a benefit period.
$534.00 Daily cost to beneficiary for hospital days beyond the 90th day.

If something should happen to you and you need more than 100 days of care are you ready to pay yourself, apply for Medicaid, or spend down until you qualify for Medicaid?

Medicaid is the state welfare health care program. Medicaid is not an entitlement system like Medicare, it is a means tested system. If you have the means to pay, you pay, if you do not then Medicaid pays. You must prove to Medicaid that you are at the poverty level and cannot pay.

Most long term care is "custodial care" — help with Activities of Daily Living or ADLs — like dressing and bathing. Custodial care is NOT covered by health insurance, Medicare, Medicare Supplement Insurance (Medigap), HMO's Senior Programs (like Senior Advantage, Medicare Advantage), or Medicaid welfare — either you have long term care insurance or you pay out-of-pocket.

Example Scenario:
You have a health change (example: stroke, accident, illness) and are hospitalized for 10 days. Then you are discharged to a rehab facility and at day 21 you will have to start paying the co-pay. If you stabilize (no improvement) at day 81 you may then be discharged and sent home or to a nursing home.

Your co-pay for the 60 days at rehab (81-21=60) is $6,600, and since you have stabilized (not going to improve) your insurance and Medicare completely stop paying.

If you are sent to a nursing home your health insurance and Medicare may continue to provide some coverage for a limited time. For continued nursing home care you will either pay yourself or apply for Medicaid (welfare). To qualify for Medicaid you disclose your financials to see if you qualify. If you do not qualify because of too much savings or cash value assets then you must "spend down" until you do qualify. See Medicaid information below.


 Your LTC insurance would have started as soon as you qualify for benefits. LTC insurance covers what is not covered by other insurance so you don't have to spend your hard earned money, making it easier to stay at home.

The average length of a stay in a nursing home: 875 Days.

Planning for your long term care includes considering the consequences your needing care will have on those around you. Once you need care insurance is not an option.


Medicaid Income Limits
Living in the community
Living in a nursing home
Single elder (over 65) or disabled is $637 per month; for an elder/disabled couple it is $956 per month With any outside income you can keep $35 per month for personal needs. If no income then you can apply for SSI and receive $42 per month.
* Different states have different requirements, check with a local Medicaid office.


Medicaid Asset Limits
Exempt Property
(what you are allowed to keep)
Nonexempt Countable Property
(what you cannot keep)
A home
A car
Household goods
Business Property & Real Estate
Term Life Insurance
Mortuary Trust & Burial Plot (up to $1500)

If you have any more than this you must spend it on your long term care before Medicaid will begin to cover your costs.

 (basically anything with cash value)
Cash over $2,000
Stocks/Bonds
IRA's, Keoghs
CDs
Single premium deferred annuities
T-Bills/Notes
Savings Bonds
Investment Property
Whole Life Insurance
Vacation Homes
Second Vehicles


What about the spouse? (not receiving Medicaid )
The spouse of a Medicaid recipient is allowed to keep a low level of income and certain assets in order to avoid poverty, but must pay amounts above these levels for the institutionalized spouses care.

For 2008 the Spousal Impoverishment Limits were increased. The Community Resource Allowance allows for the at-home spouse to keep up to $104,400.00* in assets and the institutionalized spouse can keep up to a maximum of $2,000.00 in a separate account. The at-home (community) spouse can receive a maximum monthly income of $2,610.00 (MMMNA-Minimum monthly maintenance needs allowance). (*these change so check Spousal Impoverishment)

Medicaid can put a lien on the house occupied by the at-home spouse for the purpose of recovering money spent on the spouse that is receiving Medicaid, this is called "estate recovery." Once both spouses are out of the house the state will want to be repaid. The best way to protect your income and assets is to purchase long term care insurance.

* These figures may not be current, check with Medicare and Medicaid (local welfare office) for current figures.

Medicare

Medicaid Eligibility Overview

Medicaid Local Offices Contact Information

Medicaid Gets Tough
Prepare to pay for your own long term care.
William Zatlin, of North Babylon, N.Y., may not realize it, but his bed in a Long Island nursing home costs about $11,000 a month and wiped out his cash savings in less than a year. Kiplinger Financial Article