If you've been looking into elder care housing options, you don't need to be told that paying for various options of elder care can be outrageous. If you haven't been looking into the various options, you'd better be sitting down! The average cost of nursing home care in 2008 was a whopping $50,000 a year! That's right - $50,000! You may be thinking, ah, that's no big deal because Medicare will pick up that cost. Unfortunately, that's incorrect - at least over the long term. Medicare will indeed pick up pick up the cost for a very brief period of time, but only under certain circumstances. In this article, I'm going to take you through 6 ways to help you pay for your elder's care without sending you to the poor house.
1. Personal Resources
You likely figured this would be #1, didn't you? When elders are first admitted to a nursing home or other long term care facility, the initial monthly costs come out of their own pockets - unless they have some sort of long term care coverage. If there is no coverage, most folks will run out of personal resources that have been saved for decades with the intent of either paying for long term care - or perhaps left for their children. The staggering truth is that 75% of all nursing home care patients become insolvent after a year in such a facility. It is only at that point when they can apply for Medicaid.
2. Medicaid
This is a joint state and federal program that will pay for health and long term care costs for those with low incomes or who have "spent down" their life savings and can no longer afford to pay for long term care on their own. But, this isn't a free ride. Not by a long shot. Virtually any and all income that your elder receives (Social Security, pension, etc.) is turned over to the long term care facility and then Medicaid will pay the balance owed. Oh sure, Medicaid will let your elder keep some money for monthly expenses. Last I checked, Massachusetts was set at $35 a month! Whoopie!
3. Medicare
This is a federal health insurance program for those over 65 and other that have certain disabilities. The good thing there is that it's not limited to low income or limited income folks. There are two parts to it. Part A covers most hospital bills, but very little in the way of long term are. There are deductibles that the patient is responsible for as it's very similar to health insurance. Part B covers most medical bills, medical equipment, tests and outpatient care. Part A is free to the patient, but Part B comes with a monthly cost.
4. Long Term Care Insurance
This can be an outstanding option, if you can afford it. When purchased earlier in life when you have few or no heath issues, it can be very affordable. But if you or your elder is 60 years old and they have diabetes, you either won't be able to get it, or if you can, it'll cost an arm and a leg.
The tough thing here is trying to figure out how much coverage you need. Will you need full time nursing home care, or will you be able to get by with home care? If you can afford it, you'll likely want to go with full coverage - nursing home care. The average long term care stay is 2 years, so if you buy long term insurance, you are going to want to ensure there is enough coverage for at least that time. It's just like any other type of insurance - you may need it, or you may not. But in the case of long term care, it's generally better to have it than not.
5. Medigap
This is a private insurance that covers the deductibles and co-pays of Medicare. Unfortunately, these policies only pay when long term care is covered by Medicare, which is normally only for a brief period and under specific circumstances.
6. Managed Care Plans
Otherwise known as HMOs. These plans provide comprehensive health care coverage to their members. The problem with these plans is that patients are limited to doctors and other health providers that are in the managed care system. Members must use the specified hospitals and nursing homes that have contracts with the managed care organization.
It's going to be important to keep an eye on the health care bill that was passed into law in March of 2010 to see how long term health costs will be dealt with over the long term. In most instances, when a bill is passed, you'll be able to determine exactly what any changes in current law will be, but it is believed many components of this legislation will end up in court and won't be decided for a period of time.
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