The number of seniors in our country is constantly growing, and many are already elderly and getting older. Not everyone will need to spend time in a nursing home, but many will.
Statistics from SingleCare reveal that about 70 percent of seniors will need long-term care (LTC) at some time. Other people who are not seniors may also need it. They include adults who are sick or disabled and special needs children.
Long-Term Care Is Very Expensive
The cost of long-term care varies widely depending on where you live. Some states have an average LTC price tens of thousands of dollars higher than other states.According to RetireGuide, Alaska is the most expensive state for nursing home care at an average annual cost of $176,247. It is 136 percent more expensive than the national average.
The least-expensive nursing home, RetireGuide says, is Louisiana. The average annual cost is $54,105, and in-home care costs $44,616.
Where to Get Financial Help for LTC
Because of the high cost of long-term care, many people cannot afford it, especially those with low income. Money for LTC can be obtained from several sources, but getting benefits from some of them will be a little complicated.Long-Term Care Insurance
Buying long-term care insurance is a popular way to prepare for long-term care costs, but most people cannot afford it. It can also be purchased to cover part of the costs, which reduces the overall price.A hybrid life insurance policy with a long-term care rider is another way. Once nursing home care becomes necessary, some of the policy’s face value can be used to cover the costs—or some of them.
Medicare
Although Medicare and Medigap will cover many of the medical needs of seniors, long-term care is not one of them. Healthline reports that Medicare Part A only covers short-term care up to 100 days after you have had a qualifying hospital stay. While recovering, Part A will cover care in a skilled nursing facility or provide in-home care. Hospice care will be fully covered if you are expected to live less than six months.Medicaid
Most people in long-term care rely on Medicaid to cover all or most of the bill for LTC. Since Medicaid focuses on helping low-income people, before you can be accepted, Medicaid will examine your finances.Medicaid has an income cap that requires most people to spend down their assets and reduce their income. Each state controls the exact amounts, but generally, your income is limited to around $2,000 per month for a single person and $3,000 for a couple.
Not every nursing home accepts Medicaid, Caring says, and some nursing homes only accept a certain number of Medicaid residents. The good news is that there is no limit to how long the program covers someone’s needs, but they only help with non-medical activities. Co-payments are not necessary.
Qualifying for Medicaid requires that applicants spend down their assets. It means getting rid of your assets and making yourself poor. OurParents says that your asset threshold must equal less than $2,000. Some assets not included are your primary residence, one vehicle, personal belongings, and some trusts.
When spending down your assets, you must do it a certain way. Medicaid will look back over the previous five years from the date of your application to see how you disposed of your assets—and many common ways are not approved. ElderCareResourcePlanning says the following are not acceptable:
- giving or buying gifts
- selling items at less than market value
- transferring ownership of a home or vehicle
- contributing to someone’s education, charity, or church
- paying for someone else’s bills
- loaning money
The Medicaid Waiver Program
The Medicaid Waiver Program is a state program that provides home and community-based services (HCBS) to people who need nursing home care but cannot afford it. It enables them to receive similar services at home or a community care facility. Depending on the medical conditions and the care needed, it may be able to get financial help from both Medicare and Medicaid.The waiver program, Healthline says, is controlled by the state you live in. Because the program is not an entitlement, the state may limit those accepted by putting you on a waiting list.
VA (Veterans Affairs) Benefits
Veterans may qualify for benefits that will enable them to get nursing home care or special services for their unique needs. The Veterans Administration has many long-term care units in most states. They can also provide home health care, assisted living centers, adult day care centers, and more. The VA may require a copay or for you to get additional help from Medicare or Medicaid.Reverse Mortgage
Homeowners have another way to pay for their long-term care if they have sufficient equity. You may be able to use a reverse mortgage to pay for a nursing home and possibly have some extra money.A reverse mortgage pays the homeowner a set amount each month based on the equity in the home. One spouse must live in the house, but when it is no longer needed, it will be sold to pay off the balance owed. Like a regular mortgage, you will pay interest and must maintain the home. The owner is responsible for insurance and taxes.
When you need financial help and do not know where to get the money for nursing home care for a loved one, talk to a financial planner or government services for more information. If you plan on using Medicaid, you must start at least six years in advance—or more.
The Epoch Times copyright © 2024. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
