What you need to know about paying for long-term care

Q: Why aren’t assisted living costs covered by my health insurance program?

A: When people think about assisted living, they often presume costs are covered by their medical plan. However, as a general rule, traditional employer-based health insurance will not cover daily care over a long period of time.

A common misconception is that Medicare extends to long-term care stays. However, Medicare is strictly a health insurance program that covers costs related to illnesses and injuries and, to some extent, disease prevention. But in the case of a permanent move into a skilled nursing facility, those costs are not covered.

Medicare limitations

Medicare will pay for 100 days of rehabilitation assistance such as physical therapy or skilled nursing care, whether in a facility or at home, for short periods while someone is recovering from an illness. This means that if someone needs extensive help with activities of daily living, (bathing, dressing, eating or transferring) beyond the recovery period, those services likely require separate financing arrangements through other sources.

The number of people 65 years old or older is expected to reach unprecedented levels by 2035, with close to 70 percent needing long-term care at some point during their lifetime. When extended care is out-of-pocket, many avoid seeking any assistance because the cost of care is so high.

To help offset extended care expenses, many people consider purchasing Long-Term Care Insurance. Individuals between the ages of 40 to 50 should start thinking about buying coverage because premiums are much higher later than this point, or there may not be enough providers offering plans without exclusions.

What Medicaid covers

Medicaid does pay for long-term nursing home care for those who can no longer handle tasks of daily living, but only if they have low income or no monthly earnings. Generally, you may qualify for Medicaid if you earn less than $750 in revenue per month. Check with government experts to determine if you are eligible, as requirements have strict parameters. With that said, the Medicaid program is a partnership between the federal government and each state, meaning criteria for who qualifies and what benefits are available can vary based upon where you live.

The number of people living with long-term conditions is on the rise. Research shows 73% choose to stay home rather than move to a large care facility. This is because help from a personal aide often costs less than other residential options like skilled nursing or memory support communities that offer round-the-clock services.

Key points

Seventy percent of Americans who reach age 65 will need long-term care during their remaining years. Some people will get by with unpaid assistance from family members or others, but nearly half require occasional paid assistance. About 24% will need more than two years of paid care, and 15% will spend two-plus years in a skilled nursing facility.

Determining your own extended care needs, or caregiving for others, can be financially and emotionally draining. And, because of the high cost of long-term care, 66 percent of caregivers use their retirement and savings funds to pay for others’ health situations.

The cost of care is highly variable, depending upon how long you require it, where you live, and how severe your needs are. And, the ways to pay for services vary too. Veterans may access long-term care through the U.S. Department of Veterans Affairs, but Medicaid is the single largest funding source for the majority in need.

If you have additional questions about plans at any age, make an informed decision by examining coverage basics, premium costs and policy options. Explore supplemental and other hybrid programs. Talk to someone you trust such as a family member, health care counselor, social worker, discharge planner, an Aging and Disability Resource Center staffer, Area Agency on Aging member, or someone at the Statewide Independent Living Council.

Oct. 1 was International Day of Older Persons, focusing on socioeconomic, environmental, health and climate impacts on the lives of older adults. A longer life brings opportunities, but also challenges for families and societies as a whole. Planning for the future can allow you to live well in good financial health and further extend your community contributions.

Karen Casanovas is a professional healthy aging coach in Alaska. Contact her through her website, http://www.karencasanovas.com.

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