Many people believe that there are government programs that pay for long term care (LTC) so they don’t have to worry. But it has been estimated that they only pay for about 15% of total LTC costs. Let’s look at the big three, from most likely to cover your LTC costs, to least: Medicaid, Medicare, and US Department of Veteran’s Affairs (VA).*
Medicaid is a joint federal and state program designed to help citizens who have limited assets and income. It does cover long term care, but only after you’ve impoverished yourself by spending pretty much everything you have on it yourself (usually the cut-off point is $2,000). Eligibility is not a given, and varies from state to state. People also have limited choices as many home health agencies and assisted living facilities do not accept Medicaid since the reimbursements are too low. Finally, most states have Medicaid estate recovery programs that allow the state to go back and collect what was paid in Medicaid benefits after a person has passed.
Because all US citizens can receive Medicare at 65 years old, many assume that it covers all health care costs including long term care. It’s actually the opposite; Medicare is designed only for short term care up to 100 days, such as rehab stints either at home or in a physical therapy facility or even in a nursing home. Once that recovery period is over, you’re on your own. Medicare does not pay for custodial or personal care and in order to qualify you must go from a hospital directly to a nursing or rehab facility.
3) The VA
Veterans aged 65+ who meet certain service eligibility and current health requirements are most likely to qualify for and receive long term care support from the government – anything from a basic pension to extended daily assistance. Applying can be complex, and decisions are made case-by-case, but for many of our men and women who served in the military, this may be a good place to start. Keep in mind that there may be a waiting list.
So what are your other options?
LTCI as an alternative
Unless you’re quite confident that you have the savings or assets you need to pay LTC for yourself or your parents, long term care insurance (LTCI) is an alternative to consider. It is designed precisely
to cover the huge gaps we’ve just described: if you’re neither rich nor poor, nor a qualifying veteran, LTCI may be a source of peace of mind now, and of financial support later.
*There is at least one more program available in most states. The Program for All-Inclusive Care for the Elderly (PACE) is designed to help “frail” people remain in their own homes and communities instead of having to go to a nursing home. Contact Medicaid in your state to learn more.
LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can