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STRATEGIES
How to Pay for Long Term Care
Care giving and long term care costs have risen across the spectrum of care. In home hourly rates are now as high as $25 per hour. "A la carte" style billing at assisted living facilities routinely makes a $3500 starting bill go up to $5000 a month after all the add-ons. Monthly care as a private pay patient at skilled nursing homes and high-end assisted living facilities with dementia care can run as high as $12,000 per month in many cities.
Here are the ways people pay for care now:
Life Savings
According to one recent study, 46% of seniors paying for long-term care use up their life savings before they pass away. We know of cases where the family home is sold to pay for care; four years and $350,000 dollars later, the life savings are gone. The inheritance that was meant for children and grandchildren has been spent, and more is needed to keep up with the care.
Careful Planning
Good planning and sound financial choices during a lifetime will give individuals the flexibility to get the long term care they want at the end of life. Seniors need to be especially careful how they manage their retirement investments, including the value locked in the family home. With the right advanced planning, they can prosper even in a long-term care situation. Solutions will in some cases include the need to achieve Medi-Cal eligibility.
Family Contributions
The sons and daughters of the frail elderly often constitute the front line for paying for long term care, once the life savings are exhausted. This is a financial burden on the younger generation, and strains the ties of even the closest families. If the individual qualifies for Medi-Cal, some of the family payment may be reimbursable through the Medi-Cal program.
Medicare
Medicare covers up to 100 days of rehabilitation, if the patient is still improving during this time. When the patient's health status plateaus, Medicare stops paying and the patient is converted to private pay. This can be a key moment for the family as they must quickly decide whether to bring the patient home or discharge to a skilled nursing facility.
Supplemental Insurance
Medicare supplemental insurance plans only pay a percentage of the Medicare rehabilitation therapy while in skilled care. In this environment, patient benefits are limited to the first 100 days. When the patient stops progressing during treatment, he/she plateaus and Medicare stops paying. When Medicare stops paying, so does the supplemental insurance plan. The patient is then shifted into a private pay situation.
Medi-Cal
Medi-Cal for Long Term Care has become the key program to help with care giving costs for California's elderly. It will pay for nursing home expenses, but not board and care or assisted living.
The Medi-Cal IHSS Program can potentially help with paying for in-home care, if the individual is low income and low assets. It has a separate set of regulations.
LTC Insurance
Most of today's at-risk elders do not have long term care insurance for home care, assisted living or skilled nursing care. Those who have policies, quickly learn that the policy doesn't cover the true cost of care due to policy elimination periods and other restrictive provisions.
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