This is, hands down, the question I am most frequently asked.  Unfortunately, there is no simple answer.  The response depends on a combination of factors including (but not limited to) the type of care required and the income and assets of the person in need of care.

So, to begin this conversation, let’s first define long-term care.  According to The Family Caregiver Alliance, “individuals need long-term care when a chronic condition, trauma, or illness limits their ability to carry out basic self-care tasks, called activities of daily living (ADLs), (such as bathing, dressing or eating), or instrumental activities of daily living (IADLs) (such as household chores, meal preparation, or managing money). Long-term care often involves the most intimate aspects of people’s lives—what and when they eat, personal hygiene, getting dressed, using the bathroom. Other less severe long-term care needs may involve household tasks such as preparing meals or using the telephone”.

Doesn’t Medicare pay for that?

The second most common question I hear when working with employees and families is “Medicare will pay for long term care, right”?   Sadly, that is not the case.  Medicare is a federal health insurance program for individuals 65 and older, certain younger people with disabilities, and individuals with end-stage Renal disease.  It covers care that is determined to be medically necessary.

With regard to long term care, here are some areas that Medicare does cover, and those that it does not:

Medicare does cover:

Medicare will pay for a short stay in a skilled nursing facility or rehab facility, if you meet certain conditions, (one of which is typically a hospital admission with an inpatient stay of at least three days).

Medicare will also pay for specific in home health care services (such as physical therapy or wound care) for a limited period of time, when those services are determined to be medically necessary and ordered by a physician to treat an illness or injury.

Medicare does not cover:

Medicare does not cover the cost of most long-term care services (such as assisted living) or personal care (known as custodial care or in-home care).

So, what are the options for funding long term care?

Medicaid

One option is Medicaid.  In short – Medicaid is a joint federal and state public assistance program.  Funds are allocated to states who then have purview over distribution of funds, and there is considerable difference between states as to how the programs are operated and how these funds are distributed.  Regardless of which state, Medicaid has both age and disability criteria as well as income and resource limits.

If you are considering moving a parent from one state to another, it is imperative that you learn how Medicaid operates in that state – especially if your parent is currently receiving Medicaid in their home state.  Unfortunately, I’ve heard too many stories about individuals losing Medicaid coverage after moving because the eligibility rules were different.   It is not true that a couple must use up all their joint assets for one person to qualify for Medicaid – there are allowances for assets to be allocated for the spouse who remains at home.   To learn more about the Medicaid process, including eligibility requirements and how to apply, contact the Medicaid office in your county.

Veterans benefits 

Veterans benefits are a potential option for eligible veterans and surviving spouses.  These benefits, particularly VA Aid and Attendance, can provide assistance for veterans who meet certain qualifications.  One qualification is that veterans must have served in active duty, for at least 90 days, with at least one day served during a period of war.    Surviving spouses may also be eligible, and the benefit can be used for either long term care in a facility or in-home care.  Here is a site with more information about VA Aid and Attendance.

Long Term Care Insurance

This type of insurance is designed to cover long term support and based on the type of policy, can include care in long-term care facilities or in-home care (or both).  Cost of these policies depends on several factors including (but not limited to) your age and health at the time of purchase.  It is a good idea to consult a financial advisor to advise you about the pros and cons of purchasing long term care insurance.

Local programs with public funding

It is always a good idea to check with your local Area Agency on Aging, as there are often programs that receive funding from the Older Americans Act to assist with in-home care/personal care, such as the Family Caregiver Support Program.  There is often a wait list for these services.

Private pay

Private pay is the option if no public funding or insurance coverage for long term care is available.   In Wake County the hourly rates for home care is approximately $15-25/hour.  There is typically a two to four hour minimum.  The cost of assisted living (“rest homes”) in Wake County ranges from $2000-$6000 (or above) per month, depending on the type of facility and the level of care required.  According to this study, most care in this country is provided by a combination of family members and friends (known as informal care) and privately paid in home care assistance (known as formal care).