Today's seniors enjoy a life expectancy longer than any generation in history. U.S. citizens have an average life expectancy of 78 years. And while additional years are generally considered a blessing, it is also true that the older one grows, the more likely it is that they will need healthcare and/or assisted living services.
Today's seniors, who often consider themselves among the best informed, would do well to learn about three crucial areas that pertain to their future healthcare needs:
· The potential that they may need long term care
· The cost of long-term care
· The limited federal and state aid available
According to a study by the Agency for Health Care Policy and Research, more Americans than ever will expect to utilize some type of long term care during the remainder of their lives. And with the number of people over age 65 expected to grow to 20% of the U.S. population by 2030, there is little doubt that demand for long term care services is poised to increase dramatically.
Long-term care services have evolved dramatically over the past several years. The majority of long-term care was once provided only in skilled nursing homes. Long-term care services today are provided in a wide range of settings, ranging from in-home care to community-based facilities such as adult day services and assisted care facilities to nursing homes. The cost of long term care can be significant, regardless of the setting in which it is provided. The average cost of a nursing home nationally is approximately $80,000 a year, and home care costs can reach up to $300 a day.
In order to navigate those costs, here are 8 financial resources every family should look into as they make decisions concerning assisted living:
Medicare and Medicaid
Medicare and Medicaid provide only limited help for nursing home care. Medicare is our nation's basic health insurance program for people 65 and older, regardless of their income, who qualify for Social Security benefits.
Medicare has two Parts:
1. Hospital insurance (Part A) which helps pay for inpatient hospital care and certain follow-up services
2. Medical Insurance (Part B) which helps pay for doctors' services, outpatient hospital care, home health care, hospice and other medical services. Medicare only pays for the first 20 days in skilled nursing care, and only after a hospital stay of three days or more. The patient or their family pays the first $99 per day from the 21st day through the 100th day, after which Medicare pays nothing.
Medicaid rules vary from state to state, but as former U.S. Senator David Durenburger told the U.S. Senate Special Committee on Aging, Medicaid "dictates that people must effectively impoverish themselves in order to receive government assistance." Medicaid is essentially medical aide for those who have already spent down their assets.
Medicaid Waiver Programs
Under Section 1915(c) of the Social Security Act, Medicaid law authorizes the Secretary of the U.S. Department of Health and Human Services to waive certain Medicaid statutory requirements. These Medicaid Waiver programs enable states to cover a broad array of home and community-based services (HCBS) for targeted populations as an alternative to going into an assisted living home.
Waiver services may be optional state services that either are not covered by a particular state or that enhance the state's coverage. Waivers may also include services not covered through the state plan such as respite care, environmental modifications or family training.
To be a waiver participant, an individual must be:
· Medically qualified
· Certified for the waiver's institutional level of care
· Choose to enroll in the waiver as an alternative to going into an assisted living home
· Cost Medicaid no more in the community under the waiver than he or she would have cost Medicaid in an assisted living home
· Be financially eligible based on income and assets
In addition, most assisted living communities that participate in the waiver program allocate only assisted living apartments for this, not dementia care. Also, Medicaid will only pay for a semi-private room, so they may need to double up with a roommate. They may receive supplementation from their family or from an irrevocable trust to cover the cost of an upgrade to a private room. Those assisted living communities that participate in the program offer it first to their existing residents and normally require two years of private pay to even be considered for it.
The look-back period for Medicaid is five years. Though 38 states pay for some assisted living, the programs are miniscule, covering fewer than 100,000 impoverished people, so waiting lists are long. Medicare covers home care, but just 100 visits in the weeks following a hospital stay. Contact the older adults division of your state Department of Health and Human Services to learn more about waiver programs.
Medicare coverage can be used for the treatment of Alzheimer's disease, with Medicare beneficiaries receiving reimbursement for mental health services. Medicare was never intended to cover the costs associated with custodial care, which is room and board and activities of daily living. These coverage changes still do not reimburse for this.
Further, Medicare requires a three-day prequalifying hospital stay before paying for care in a nursing home. Medicare covers certain care procedures and some limited rehabilitation therapies. The physicians who visit our homes are all Medicare-certified providers, so Medicare often covers the cost of their visits, subject to the co-payment.
Veterans and surviving spouses may be entitled to VA Aid and Attendance. To qualify, the veteran must have been honorably discharged. The veteran must have served at least 90 days, including at least one day during wartime. The individual must be over age 65 or permanently and totally disabled.
As for income qualifications to determine eligibility, the gross household income less out-of-pocket medical expenses (including assisted living, skilled care or home care) is the income counted by the VA. The VA will not pay benefits if income is greater than the Maximum Available Pension Resource (MAPR). Additionally, there are limits on net worth.
Exempt assets may include primary residence, car, term life insurance and certain Investments. The cash value of life insurance is countable. If assets exceed the allowable amount, a good elder law attorney can set up a trust and move assets to a trust, thereby meeting asset qualification thresholds.
Have the right documents before calling the VA Veteran's Honorable Discharge, including a DD-214 or 53-55, marriage certificate and death certificate (if applicable).
Long-term Care Insurance
Long-term care insurance is one other way you may pay for long-term care. This type of insurance will pay for some or all of your care depending upon the benefit amount and the setting. Many newer policies feature endorsements to cover costs of home health care and assisted living. The Health Insurance Portability and Accountability Act, or HIPAA, gives some federal income tax advantages to people who buy certain long-term care insurance policies. These tax-qualified policies offer deduction of premiums and other benefits.
Many seniors opt to purchase a policy with a benefit amount that covers a portion of the expected monthly costs so as to hedge their expected use. Insurer rating services such as www.ambest.com can help compare insurer's financial strength and offerings, or you can check for free at your local public library. Seniors who purchase these policies early will pay dramatically lower premiums then those who wait until they are 60 or older.
FHA/HUD HECM Reverse Mortgage Program
A reverse mortgage is a home loan taken against the equity one has amassed in their home. Unlike conventional mortgages or home equity loans, the FHA/HUD HECM reverse mortgage currently allows homeowners over the age of 62 to borrow some of their home equity with no income or credit score requirement and never have to repay it as long as one of the borrowers resides in the home. Eligible properties are multifamily homes, FHA approved condominiums and PUD's.
Borrowers can receive funds in a lump sum, as a line of credit or get monthly payments every month. There are no restrictions on what the funds are to be used for, and the payments are not considered income so they generally do not affect social security, Medicare and in some states can even be used in conjunction with Medicaid.
These loans are very safe, as there is no personal liability. The most one can ever owe is the appraised value of the home when the last borrower permanently leaves the home. In order to assure that homeowners are doing the right thing, FHA requires that borrowers attend a counseling session with a FHA-approved counselor before they can apply for a HECM reverse mortgage.
The Pharmaceutical Research and Manufacturers of America (PhRMA) maintains a directory of programs that provide drugs to physicians whose patients cannot otherwise afford them.
For more information on PAAD, Senior Gold program or PhRMA programs, call (800) 762-4636.
Walmart Pharmacy has a $4 Prescriptions Program, available at Walmart, Neighborhood Market and Sam's Club pharmacies nationwide. The retailer offers up to 95% of the prescriptions written in the majority of therapeutic categories. The affordable prices for these prescriptions are available for commonly prescribed dosages for up to 30-day or 90-day supplies. Ask your pharmacist or physician about switching to 90-day prescriptions for appropriate medications.
The State Health Insurance Assistance Program, or SHIP, is a national program that offers one-on-one counseling and assistance to people with Medicare and their families. Through federal grants directed to states, SHIPs provide free counseling and assistance via telephone and face-to-face interactive sessions, public education presentations and programs and media activities. These programs have been very popular to help families decide which Medicare Supplement program is right for them. Call (201) 336-7400 for more information.
Home Health Care Services
Global Options (GO) for Long Term Care participants have the option to hire and direct their own service providers. GO is designed to supplement – not replace – the assistance of family, friends and neighbors.
By providing a flexible package of services and supports, GO strengthens the ability of caregivers to continue in their vital role as primary support providers. GO participants work with a care manager to create an individualized plan of care based on a comprehensive assessment of the participant's healthcare needs. Once the plan of care is approved, community-based services are put in place and monitored to ensure quality and effectiveness.
Participants must demonstrate need for assistance in at least three activities of daily living (ADLs) or have a cognitive impairment. In order to be eligible, financial and clinical criteria must be met. Contact (877) 222-3737 for additional information.
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Thank you for your referrals! Please keep us in mind for your clients’ future memory care needs.
Benjamin Pearce is an expert in the senior living industry and dementia-related care. He has thirty-five years of experience working with over 200 communities in 36 states encompassing over $1 billion in annual revenue. Pearce has extensive experience as a published author of several books and as a public speaker for caregivers and supervisors. His book, Senior Living Communities: Operations Management and Marketing for Assisted Living, Congregate and Continuing Care Retirement Communities is the go-to handbook for effective senior residential facilities. It has also been converted into an online classroom for the certification of assisted living administrators in several states. He is also the author of 27 eBooks on Amazon Kindle and iTunes covering industry related topics. He is a frequent contributor on senior living for publications such as Provider, Contemporary Long Term Care and Assisted Living Success. Pearce also serves as an expert witness for assisted living and skilled nursing litigation. Pearce shares his expertise as an adjunct professor for Johns Hopkins University and New York University, while teaching a variety of courses about senior living development and operations. He is also a professor at the Institute for Senior Living Education, based in Connecticut, an instructor for the Executive Director Certification Course and an instructor for EasyCEU.com, a continuing education provider. Pearce has received a number of awards including the Contemporary Long Term Care Order of Excellence, awarded to recognize outstanding operators and an elite fraternity whose members have been judged by their peers to be the nation's best.