More on Long term care insurance, Nursing Homes, and Medicare/Medicaid
A couple of days ago I wrote about the basics of buying long term care insurance. Today, some more thoughts, in particular about Medicare and Medicaid, so you can think about whether you want long-term care insurance. First, some basics, then a longer explanation:
Basics (I’m generalizing what is a very complicated subject, to illustrate. Please do your own research to be sure you have the full story):
- Medicare only pays for acute care, for up to 100 days, after you have been in the hospital 3 days
- After that, you go on “private pay” in a nursing home, until you run out of money
- Then Medicare will pay for the nursing home, but possibly in a less desirable room
- Nursing home costs average over $5800 a month ($196 a day), according to AARP (depending on where you live)
Discussion (please understand that I’m using personal experiences to illustrate, and your situation might be quite different):
Medicare is available to those over 65, but it doesn’t pay for everything. It is designed to pay for acute care, for short periods of time. So it’s not going to pay for that nursing home for someone who has Alzheimer’s or Parkinson’s disease, or stroke. For example, my mother had heart disease and kidney problems. She had been in an assisted living facility, but after 3 days in the hospital (required by Medicare), she was transferred to a nursing home. Medicare paid for the first 20 days, then $119 a day for 80 more days. Then, if she had lived, she would have gone on what’s called “private pay” in the nursing home and she would have had to pay for it herself.
During that first 100 days, Medicare would only pay for the nursing home if she were actively getting rehab, so she had to get physical therapy every day and dialysis. When she was taken off dialysis, she was no longer in ‘active care’ so she was put on private pay.
Of course, everyone’s situation is different, but you can see that Medicare is not going to pay for long-term nursing care. So if you would need to be in a nursing home for a long time, you would have to pay for it yourself, or get long-term care insurance to pay for it. But what if you don’t get the LTC insurance and you run out of money?
It is a common misconception that if you run out of money (become “indigent”), you get kicked out of the nursing home. Not true. Medicaid can take over if you run out of money. Another example: My aunt had a stroke when she was in her mid 80s. She was in a nursing home for almost 15 years! At one point, she ran out of money, and her nursing home care was paid for by Medicare. Any income she received from her husband’s pension and Social Security was turned over to the nursing home to help pay for her care, but the nursing home never missed a beat in caring for her, until she died at 99.
Some nursing homes will move you to a less-desirable room if you go on Medicare, so that’s a consideration, but you can’t be removed, as far as I know. Now, there are lots of things to know about “running out of money” and how it affects your spouse or others, so read up more on this. I’d recommend a Nolo book called Long-Term Care.
So, here are the questions to think about:
- If you don’t get LTC insurance, what are your chances of having to be in a nursing home for a long time and using up all your savings?
- Do you want to leave money for a spouse or children?
- Do you want to be possibly put in a less desirable room in the nursing home if you go on Medicaid?
- What if you got long-term care insurance and you didn’t need it? But how do you know until something happens?
Like all insurance, you can’t buy it when you need it, but being informed about the possibilities helps you be a more informed consumer.
Next, typical provisions in LTC insurance policies.
Image source: Newscom
Tags: baby boomers, healthcare costs, long-term care insurance, Medicaid, MedicareRelated Stories
POSTED IN: Boomer Health, Boomers nearing retirement, Boomers: The Sandwich Generation, Health
1 opinion for More on Long term care insurance, Nursing Homes, and Medicare/Medicaid
Resources for Long-Term Care Insurance Information
Oct 24, 2008 at 4:25 pm
[...] you have been reading my posts on (1) Basics of LTC Insurance and (2) How LTC Insurance works with Medicare and Medicaid, you may have more questions than [...]
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