The two most common public programs, Medicare and Medicaid, do offer some long-term care coverage, but this coverage is different between the two.
Medicare pays for long-term care for those that require skilled services or rehabilitative care, as follows:
- Nursing home stays are covered up to a maximum of 100 days.
- At-home services are covered for those that are also receiving other skilled in-home services, but this coverage is only provided for short periods of time.
- Non-skilled assistance for activities of daily living, which make up the majority of long-term care services, are not covered.
In general, Medicaid provides a much greater level of coverage for long-term care and also covers many of the costs that Medicare does not. However, only those that are below a certain level of income and meet other requirements qualify.
Medicaid is administered by the States. Each State has different qualifying guidelines. General qualifications are that you have less than $2000 in assets and limited income to qualify. While Medicaid’s assessment of your income is relatively straightforward, the assessment of your assets can be fairly complex, depending on how much and what kind of assets you have.
Accordingly, for both Medicare and Medicaid, any costs that are not covered must be paid directly or must be provided by other public or private insurance. For those that don't qualify for Medicaid, and have assets that they would like to protect, then you may want to consider Long-Term Care Insurance. Listed below are some guidelines in purchasing Long-Term Care Insurance.
Buy the right amount of insurance
It is important to not buy too much because the associated premiums can be quite high and it may be possible to pay for certain costs out-of-pocket. Likewise, it is important not to buy too little because certain long-term care costs can be very high. Additionally, it is always possible to purchase too much insurance initially and decrease the coverage later, but the opposite may not be possible.
Carefully examine each policy
It is crucial to understand what a policy covers and how it may apply to one's situation. For example, if a plan pays for room and board in a facility, but one does not need a facility and only needs medication and care, then he will be paying for something that he does not need.
It is cheaper to buy insurance at a younger age. Currently, the average person buys long-term care insurance at approximately the age of 60, when it is already relatively expensive to do so.
Additionally, it is important to note that not everyone is eligible to buy long-term care insurance. Common examples of ineligibility include those who:
- Have certain conditions, such as AIDS, Alzheimer's or metastatic cancer.
- Already need help with activities of daily living.
- Have recently had a stroke or have a history of strokes, or have other conditions which have a high probability of long-term care requirements.
As long-term care is a highly burdensome and financial draining event. As people get older, they need to start looking at and carefully researching available Long-Term Care options.