Long Term Care Info
In the 2000, almost 10 million people needed some form of long-term care in the United States. Of this population, 3.6 million (37%) were under age 65 and 6 million (63%) were over age 65 (Roger & Komisar, 2003). Almost 70% of people turning age 65 will need long-term care at some point in their lives. This section of the website provides basic information so you can begin to think about how you will handle the need for long-term care. Your path will be unique to you, and based on your preferences and circumstances. Let’s look at the basic questions covered in this section:
- What is long-term care?
- Who needs care?
- How much care will you need?
- Who will provide your care?
- Where can you receive care?
- Who pays for long-term care?
Many people think the phrase “long-term care” refers to an insurance policy. While insurance may be part of your strategy, long-term care encompasses everything from long-term services and supports and finances, to where you will live and how you will navigate the myriad of legal, family, and social dynamics along the way.
What Is Long-Term Care?
Long-term care is a range of services and supports you may need to meet your personal care needs. Most long-term care is not medical care, but rather assistance with the basic personal tasks of everyday life, sometimes called Activities of Daily Living (ADLs), such as:
- Using the toilet
- Transferring (to or from bed or chair)
- Caring for incontinence
- Managing money
- Taking medication
- Preparing and cleaning up after meals
- Shopping for groceries or clothes
- Using the telephone or other communication devices
- Caring for pets
- Responding to emergency alerts such as fire alarms
Who Needs Care?
70% of people turning age 65 can expect to use some form of long-term care during their lives. There are a number of factors that affect the possibility that you will need care:
- The older you are, the more likely you will need long-term care
- Women outlive men by about five years on average, so they are more likely to live at home alone when they are older
- Having an accident or chronic illness that causes a disability is another reason for needing long-term care
- Between ages 40 and 50, on average, eight percent of people have a disability that could require long-term care services
- 69 percent of people age 90 or more have a disability
- Chronic conditions such as diabetes and high blood pressure make you more likely to need care
- Your family history such as whether your parents or grandparents had chronic conditions, may increase your likelihood
- Poor diet and exercise habits increase your chances of needing long-term care
- If you live alone, you’re more likely to need paid care than if you’re married, or single, and living with a partner
How Much Care Will You Need?
The duration and level of long-term care will vary from person to person and often change over time. Here are some statistics (all are “on average”) you should consider:
- Someone turning age 65 today has almost a 70% chance of needing some type of long-term care services and supports in their remaining years
- Women need care longer (3.7 years) than men (2.2 years)
- One-third of today’s 65 year-olds may never need long-term care support, but 20 percent will need it for longer than 5 years
The table below shows that, overall, more people use long-term care services at home (and for longer) than in facilities.
Distribution and duration of long-term care services
Type of care
Average number of years
Percent of people who use
Unpaid care only
Less than 1 year
Any care at home
Less than 1 year
Any care in facilities
Who Will Provide Your Care?
Long-term care services and support typically come from:
- An unpaid caregiver who may be a family member or friend
- A nurse, home health or home care aide, and/or therapist who comes to the home
- Adult day services in the area
- A variety of long-term care facilities
A caregiver can be your family member, partner, friend or neighbor who helps care for you while you live at home. About80 percent of care at home is provided by unpaid caregivers and may include an array of emotional, financial, nursing, social, homemaking, and other services. On average, caregivers spend 20 hours a week giving care. More than half 58 percent have intensive caregiving responsibilities that may include assisting with a personal care activity, such as bathing or feeding.
Information on caregivers show that:
- About 65.7 million people in the US (one in four adults) were unpaid family caregivers to an adult or child in 2009
- About two-thirds are women
- Fourteen percent who care for older adults are themselves age 65 or more
- Most people can live at home for many years with help from unpaid family and friends, and from other paid community support
Where Can You Receive Care?
Examples of home care services include:
- An unpaid caregiver who may be a family member or friend
- A nurse, home health or home care aide, and/or therapist who comes to the home
Community support services include:
- Adult day care service centers
- Transportation services
- Home care agencies that provide services on a daily basis or as needed
Often these services supplement the care you receive at home or provide time off for your family caregivers.
Outside the home, a variety of facility-based programs offer more options:
- Nursing homes provide the most comprehensive range of services, including nursing care and 24-hour supervision
- Other facility-based choices include assisted living, board and care homes, and continuing care retirement communities. With these providers, the level of choice over who delivers your care varies by the type of facility. You may not get to choose who will deliver services, and you may have limited say in when they arrive.
For many, a blended approach to long-term care works best. Most consumers want to remain in their homes for as long as possible and delay facility care until they need it. Plan early and look for flexible options that give you more say.
Participant Directed Services are a way to provide services that lets you control what services you receive, who provides them, and how and when those services are delivered. They provide you with information and assistance to choose and plan for the services and supports that work best for you including:
- Who you want to provide your services (can include family and friends)
- Whether you want to use a home care service agency
In facility-based services you generally don’t have the option to hire someone independently, but you should have choices about:
- Which staff members provide your care
- The schedule you keep
- The meals you eat
In home and community-based settings, you should have the ability to participate or direct the development of a service plan, provide feedback on services and activities, and request changes as needed.
GOOD TO KNOW
Many publicly funded programs that provide home and community services, such as Medicaid, are using this approach because it is more what people want.
Who Pays For Long-Term Care?
The facts may surprise you.
Consumer surveys reveal common misunderstandings about which public programs pay for long-term care services. It is important to clearly understand what is and isn’t covered.
- Only pays for long-term care if you require skilled services or rehabilitative care:
- In a nursing home for a maximum of 100 days, however, the average Medicare covered stay is much shorter (22 days).
- At home if you are also receiving skilled home health or other skilled in-home services. Generally, long-term care services are provided only for a short period of time.
- Does not pay for non-skilled assistance with Activities of Daily Living (ADL), which make up the majority of long-term care services
- You will have to pay for long-term care services that are not covered by a public or private insurance program
- Does pay for the largest share of long-term care services, but to qualify, your income must be below a certain level and you must meet minimum state eligibility requirements
- Such requirements are based on the amount of assistance you need with ADL
- Other federal programs such as the Older Americans Act and the Department of Veterans Affairs pay for long-term care services, but only for specific populations and in certain circumstances
GOOD TO KNOW
Like public programs, private sources of payment have their own rules, eligibility requirements, copayments, and premiums for the services they cover.
- Most employer-sponsored or private health insurance, including health insurance plans, cover only the same kinds of limited services as Medicare
- If they do cover long-term care, it is typically only for skilled, short-term, medically necessary care
There are an increasing number of private payment options including:
Long-Term Care Consideration For LGBT Adults?
This section is designed to assist Lesbian, Gay, Bisexual and Transgender (LGBT) individuals in understanding their unique needs and special considerations when planning for future care needs. The information should be seen as a supplement to the overall site content. It takes into consideration laws, programs and services that may impact LGBT individuals and couples and their planning process, including:
- Laws and regulations that differ from state to state that should affect your decisions
- Resources from Lambda Legal, an organization whose mission is to protect the civil rights of LGBT individuals. They have a webpage that details laws and policies in each state that protect LGBT individuals that you may find useful
- An article by Services and Advocacy for LGBT Elders (SAGE) titled “LGBT Older Adults: Facing Legal Barriers to Caring for Loved Ones” that provides great information about LGBT caregivers
LGBT – Health Disparities Impacting LTC
Many LGBT individuals experience health disparities throughout their lives. While health issues in anyone’s younger years may lead to the need for long-term care later in life, limited research shows that health disparities can have a major impact on some LGBT individuals, and this should be taken into account in planning for future long-term care needs. Below are categories of disparities and our current understanding of how they impact LGBT individuals.
Barriers to Health Care Access
LGBT Adults are:
- Less likely to have health insurance coverage
- More likely to delay or not seek medical care
- Facing barriers to access as older adults due to isolation and a lack of culturally competent providers. One study found 13% of older LGBT adults were denied or provided inferior health care.
- More likely to delay or not get needed prescription medications
- More likely to receive health care services in emergency rooms
- Fail to receive screenings, diagnoses and treatment for important medical problems. 22% of LGBT older adults do not reveal sexual orientation to physicians. In some states health care providers can decline to treat or provide certain necessary treatments to individuals based on their sexual orientation or gender identity.
- Particularly distressed in nursing homes. One study indicates elderly LGBT adults face distress from potentially hostile staff and fellow residents, denial of visits from partners and family of choice, and refusal to allow same-sex partners to room together
Negative Impact on Physical and Mental Health and Well-Being
Societal biases are taking a toll on LGBT adults. They are:
- Less likely to report having good health than their heterosexual counterparts
- More likely to have cancer
- More likely to suffer psychological distress
- More likely to require medication for emotional health issues
- Lesbian and bisexual women are less likely to receive mammograms and are more likely to be overweight or obese.
- 41% of LGBT adults age 50 + have a disability
- Transgender adults are much more likely to have suicide ideation
More Likely to Engage in Risky Behavior
- LGBT adults are more likely to have problems with alcoholism
- Older lesbians are significantly more likely to engage in heavy drinking
- LGBT adults are more likely to smoke cigarettes
- Gay men are at higher risk of HIV and other STDs, especially among communities of color
Research also indicates that if you live alone, you’re more likely to need paid care than if you’re married or single and living with a partner. Important implication for LGBT individuals: data shows that people living alone are more likely to need paid long-term assistance. Planning is particularly important for such individuals
LGBT – Caregivers
Among LGBT elders, many singles and couples are estranged from their families of birth, normally the largest source of support when long-term care is needed. Many in the LGBT community are reliant on “families of choice” for their support. As defined by the National Resource Center on LGBT Aging, these are diverse family structures that:
- Are usually created by LGBT people, immigrants, and racial or ethnic minorities
- Include but are not limited to, life partners, close friends, and other loved ones not biologically related or legally recognized
- Are the source of social and caregiving support
- Provided a tremendous amount of support to gay men during the early years of the AIDS epidemic
- Tend to be from the same age cohort
- For the aging LGBT population, this may mean that many in their families of choice are also in need of support and services and therefore may not be available to provide the level of support needed.
A major question often faced by those needing long-term care is “Do you have family members who will provide care?” Whether you have a family of choice, family of origin, or both to assist you in the event you need long term supports and services, plan ahead with your ‘family’ now and begin to talk with your loved ones to develop a plan of care.
LGBT – Participated Directed Services
Regardless of race, ethnicity, sexual orientation or gender identity, individuals want to have choices and control over the decisions made about their long-term care. Many publicly funded programs provide Participant Directed Services for those who choose it. Some things to consider:
- Be sure to check if one’s chosen provider is culturally competent to work with LGBT individuals, their partners and their family of choice
- LGBT adults may want to work with LGBT service organizations or culturally competent mainstream aging organizations to identify providers that are competent to meet their needs
Finding individual or agency providers competent to work with LGBT individuals and families may prove difficult for some. In addition to working with local LGBT organizations or inclusive mainstream aging providers, LGBT individuals may want to use the resources of the National Resource Center on LGBT Aging for additional information and assistance. This web-based clearinghouse contains a number of valuable resources and hopes to add a new section highlighting LGBT-friendly services.
LGBT – Housing, Financial, Legal Matters
Whether they are looking for supportive services in their current home or looking for new housing with supportive services, LGBT individuals and couples need to ensure that services or housing providers are inclusive and culturally competent to work with LGBT families.
A new and growing option is LGBT elder housing. It’s limited in availability now, but more of these residences designed specifically for the needs of the LGBT aging community are springing up across the U.S.
For more information on housing and supportive services, including LGBT specific housing, go to the National Resource Center on LGBT Aging at www.lgbtagingcenter.org
Continuing Care Retirement Communities (CCRC)
Not all CCRCs are the same, and not all are LGBT competent:
- Since LGBT individuals or same-sex couples may be treated differently depending on the CCRC, it’s important to research the facility thoroughly before making a decision.
- As noted above, you may want to consider retirement housing with services designed for LGBT older adults.
Due to the lack of uniformity in state and federal laws, the financial implications for LGBT couples—even those who are legally married—are very different than for heterosexual married couples. Consider that:
- In states that allow it, having a legally recognized partnership (domestic partnership, civil union, marriage, etc.) increases your chances of maximizing insurance and financial benefits.
- However, as long as the Defense of Marriage Act (DOMA) remains the law, you have very limited access to federal partner benefits.
- There are over 1,000 Federal laws in which marriage status is a consideration. These laws confer rights, protections, and benefits to opposite-sex married couples.
- Under DOMA, partners in same-sex unions cannot receive a wide range of federal benefits, including Social Security survivor benefits, federal tax benefits and federal employee health and retirement benefits.
- Although some states allow gay and lesbian couples to marry, the majority of states don’t recognize marriages between same-sex partners
- In other states, same-sex couples can register as domestic partners, but under most Federal laws, this makes no difference in terms of benefit eligibility.
- Same-sex couples, whether unmarried, married, or registered as domestic partners, are not permitted to enjoy most of the federal marriage benefits provided to opposite-sex married couples. Plan accordingly.
Planning for long-term care can be complicated and filled with pitfalls. That’s why having legal documents that clearly define your relationship and individual interests, and clearly express your wishes, is of particular importance to members of the LGBT community.
Regardless of whether you are in a domestic partnership, marriage or other legal relationship, you should still be prepared with a Power of Attorney for Health or Property, a will, and any other legal documents that clearly state your wishes
LGBT – Paying For Long-Term Care – Public & Private
Applying for Medicaid
Medicaid regulations related to long-term care include a series of “spousal impoverishment protections” that prevent a healthy spouse from losing a primary residence or savings in order to qualify a spouse for Medicaid. In most states these protections don’t apply to same-sex couples. However:
- States have received guidance from the Centers for Medicare and Medicaid Services on how they can extend the spousal impoverishment protections to same-sex couples.
- The intent of this guidance is to encourage additional states to recognize that same-sex couples have the same need for spousal protections.
- SAGE (Services and Advocacy for LGBT Elders) has produced a guide to help the LGBT community understand Medicaid and spousal impoverishment, including estate recovery, and the implications for same-sex couples.
GOOD TO KNOW
The National Resource Center on LGBT Aging has an excellent section on “Medicaid and the LGBT Community: Paying for Long-Term Care” that we recommend you read. It provides in depth coverage on what LGBT individuals and couples should look for in applying for Medicaid.
Older Americans Act Programs
Older Americans Act (OAA) programs are available to adults aged 60 and older. There are no specific financial eligibility criteria for OAA services, though Congress has directed that they generally be targeted for low-income, frail seniors, minority older adults, seniors living in rural areas and other older adults of greatest social need. Additionally:
- Not all providers of aging services funded through the OAA are inclusive and culturally competent.
- Check with LGBT friends and acquaintances to see if they have any suggestions.
- Your local LGBT community center may be helpful in steering you toward inclusive providers.
- The National Resource on LGBT Aging has a special section for LGBT Older Adults with many resources including a tool that helps you find resources in your state.
Veterans Affairs LTC Benefits
While “Don’t Ask, Don’t Tell” is gone now, the impact of its demise on LGBT veterans is yet to be determined. In general, VA benefits are some of the best. Should you want to do some research before contacting the VA directly, here are a few resources you may find helpful:
- The United States Department of Veterans Affairs has a list of organizations that may be of assistance.
- The Center on Veterans Health and Human Services website includes a page on LGBT Veterans with information and resources on VA LGBT Health Policies.
- The Service members Legal Defense Network has a lot of information for LGBT service members on their website and offer free legal advice.
Long-term Care Insurance
Many issues need to be considered before buying Long-term Care Insurance. In addition to the information provided in the Costs & How to Pay Section of this site, you should note that:
- Different states have different policies and these may include different definitions of “family” that could affect eligibility requirements for same-sex partners.
- These definitions may also affect a public employee’s ability to buy into benefits, depending on the state. Thorough research should be done before purchasing any policy.
- As you read this section, it may be a good time to reference Lambda Legal’s map of relevant state laws.
For LGBT people living with others, where the home is not jointly owned, you may want to consult an LGBT- friendly lawyer, Lambda Legal, or the National Center for Lesbian Rights for assistance.
The use of Annuities to pay for long-term care may not involve special considerations for LGBT people, but seeking advice from a trusted professional is always advised:
- There may be issues under “Immediate Annuities” for transgender individuals because payment is gender-based under the assumption that women live longer than men and therefore receive smaller monthly payments
- Work with a trusted legal professional or consult the National Center for Transgender Equality to determine how being transgender affects the calculation for this insurance in your state
Charitable Remainder Trusts may be a good option for LGBT individuals with assets, though same-sex couples should be sure that state laws don’t have a negative impact on them should one partner die. For more information, refer to Lambda Legal’s “Take the Power: Tools for Life and Financial Planning.”
Spousal Impoverishment Laws in your state may impact how same-sex couples are treated under Medicaid Disability Trusts, so be sure to do your homework before entering into this arrangement. To learn more, see the National Resource Center on LGBT Aging’s “Medicaid and the LGBT Community: Paying for Long-Term Care.”
In general, planning for long-term care is like planning for dementias like Alzheimer’s disease. While many of the same planning steps apply, certain steps take on added importance. The loss of executive function associated with dementia can create hardships for caregivers in arranging or paying for care. The ability to comprehend finances and care choices is often among the first signs of dementia. To avoid problems in planning, the following steps can be taken:
- Advanced Care Directive — to make sure care choices reflect preferences
- Medical Power of Attorney — to make sure decisions can be made for persons no longer able to communicate their wishes
- Power of Attorney — to make sure financial and estate decisions can be made to pay for care, apply for assistance (i.e. Medicaid, state based programs) or for the ongoing management of an estate.
Once symptoms appear, dementia makes the long-term care planning process more complex. It causes a specific set of challenges that also must be considered when deciding what your next steps will be. Among these are:
- Safety issues specific to people with Alzheimer’s
- Working with caregivers that understand the symptoms of dementia and how to respond effectively
- Medical specialists and products that may add to the cost of care, especially in regards to drugs specifically tailored to your loved one’s needs
- Adult day services that provide socialization and activities in a safe environment to both provide a break to the caregiver as well as giving the people with Alzheimer’s positive stimulus
While people with dementia can stay in the home for some time, for most there will come a time when professional help, or living in a facility, becomes necessary. Today’s options for facility care may include assisted-living arrangements that specialize in care for people with dementia. Here are just a few of the possibilities commonly available:
- To learn more about general assisted-living facilities follow the link here
- Specialized dementia care facilities, also known as “memory care” assisted living, generally offer supports and protections that go beyond traditional assisted living communities. For example, having specialized staff training, secured exits, and enhanced visual cues to help residents feel more at ease in unfamiliar surroundings can be part of one of these facilities*
- Nursing homes include all the services of an assisted living facility with the added service of full-time nursing care, 24-hours a day. Some are designed specifically for people with Alzheimer’s*
Avoiding A Fall
Did you know that one in three older Americans falls every year? Falls are the leading cause of both fatal and nonfatal injuries for people aged 65+.
Falls can result in hip fractures, broken bones, and head injuries and significant loss of independence. Falls often trigger the onset of a series of growing needs. For those over age 75, fallers are more than four times more likely to be admitted to a skilled nursing facility. (Donald and Bullpitt, 1999)
And falls, even without a major injury, can cause an older adult to become fearful or depressed, making it difficult for them to stay active.
The good news about falls is that most of them can be prevented. The key is to know where to look. Here are some steps developed by the National Council on Aging (NCOA) to help your older loved one reduce their risk of a fall:
6 Steps to Reducing Falls (Source: National Council on Aging)
1. Enlist their support in taking simple steps to stay safe. For example:
- Ask your older loved one if they’re concerned about falling
- Many older adults recognize that falling is a risk, but they believe it won’t happen to them or they won’t get hurt—even if they’ve already fallen in the past
- A good place to start is by sharing NCOA’s Debunking the Myths of Older Adult Falls. If they’re concerned about falling, dizziness, or balance, suggest that they discuss it with their health care provider who can assess their risk and suggest programs or services that could help
2. Discuss their current health conditions:
- Find out if your older loved one is experiencing any problems with managing their own health
- Ask whether they are having trouble remembering to take their medications—or are they experiencing side effects?
- Ask if it is getting more difficult for them to do things they used to do easily?
- Also make sure they’re taking advantage of all the preventive benefits now offered under Medicare, such as the Annual Wellness visit. Encourage them to speak openly with their health care provider about all of their concerns
3. Ask about their last eye checkup:
- If your older loved one wears glasses or contact lenses, make sure they have a current prescription and they’re using the glasses/contacts as advised by their eye doctor
- Remember that using tint-changing lenses can be hazardous when going from bright sun into darkened buildings and homes. A simple strategy is to change glasses upon entry or stop until their lenses adjust
- Bifocals also can be problematic on stairs, so it’s important to be cautious. For those already struggling with low vision, consult with a low-vision specialist for ways to make the most of their eyesight
4. Notice if they’re holding onto walls, furniture, or someone else when walking or if they appear to have difficulty walking or arising from a chair, because:
- These are all signs that it might be time to see a physical therapist
- A trained physical therapist can help your older loved one improve their balance, strength, and gait through exercise
- They might also suggest a cane or walker—and provide guidance on how to use these aids. Make sure to follow their advice.
- Poorly fit aids actually can increase the risk of falling
5. Talk about their medications:
- If your older loved one is having a hard time keeping track of medicines or is experiencing side effects, encourage them to discuss their concerns with their doctor and pharmacist
- Suggest that they have their medications reviewed each time they get a new prescription
- Some find it useful to use a spreadsheet to keep track of medications and schedules. Adding a timed medication dispenser that can be refilled each month by a family member can also promote peace of mind and ensure adherence to the prescribed regime
- Beware of non-prescription medications that contain sleep aids—including painkillers with “PM” in their names. These can lead to balance issues and dizziness. If your older loved one is having sleeping problems, encourage them to talk to their doctor or pharmacist about safer alternatives.
6. Do a walk-through safety assessment of their home.
There are many simple and inexpensive ways to make a home safer. For professional assistance, consult an Occupational Therapist. Here are some examples:
- Lighting: Increase lighting throughout the house, especially at the top and bottom of stairs. Ensure that lighting is readily available when getting up in the middle of the night
- Stairs: Make sure there are two secure rails on all stairs
- Bathrooms: Install grab bars in the tub/shower and near the toilet. Make sure they’re installed where your older loved one would actually use them. For even greater safety, consider using a shower chair and hand-held shower
For more ideas on how to make the home safer, the Centers for Disease Control (CDC) offers a home assessment checklist in multiple languages. Click the link or go to this web address:
NCOA, the Administration on Aging, and the CDC also promote a variety of community-based programs, like A Matter of Balance, Stepping On, and Tai Chi, that can help older adults learn how to reduce their risk of falling. Contact your Area Agency on Aging to find out what’s available in your area.
A life insurance policy feature that let’s you use some of the policy's death benefit prior to death.
Basic actions that independently functioning individuals perform on a daily basis:
- Transferring (moving to and from a bed or a chair)
- Caring for incontinence
Many public programs determine eligibility for services according to a person's need for help with ADLs. Many long-term care insurance policies use the inability to do a certain number of ADLs (such as 2 of 6) as criteria for paying benefits.
Recovery is the primary goal of acute care. Physician, nurse, or other skilled professional services are typically required and usually provided in a doctor's office or hospital. Acute care is usually short term.
Services provided during the day at a community-based center. Programs address the individual needs of functionally or cognitively impaired adults. These structured, comprehensive programs provide social and support services in a protective setting during any part of a day, but not 24-hour care. Many adult day service programs include health-related services.
Adult Day Services
Services provided during the day at a community-based center. Programs address the individual needs of functionally or cognitively impaired adults. These structured, comprehensive programs provide social and support services in a protective setting during any part of a day, but not 24-hour care. Many adult day service programs include health-related services.
(also called Health Care Directive, Advanced Health Care Directive, Living Will, or Health Care Directive) Legal document that specifies whether you would like to be kept on artificial life support if you become permanently unconscious or are otherwise dying and unable to speak for yourself. It also specifies other aspects of health care you would like under those circumstances.
ADRCs serve as single points of entry into the long-term supports and services system for older adults and people with disabilities. Through integration or coordination of existing aging and disability service systems, ADRC programs raise visibility about the full range of options that are available, provide objective information, advice, counseling and assistance, empower people to make informed decisions about their long term supports, and help people more easily access public and private long term supports and services programs.
Progressive, degenerative form of dementia that causes severe intellectual deterioration. First symptoms are impaired memory, followed by impaired thought and speech, and finally complete helplessness.
A contract in which an individual gives an insurance company money that is later distributed back to the person over time. Annuity contracts traditionally provide a guaranteed distribution of income over time, until the death of the person or persons named in the contract or until a final date, whichever comes first.
Disease involving inflammation of a joint or joints in the body.
Residential living arrangement that provides individualized personal care, assistance with Activities of Daily Living, help with medications, and services such as laundry and housekeeping. Facilities may also provide health and medical care, but care is not as intensive as care offered at a nursing home. Types and sizes of facilities vary, ranging from small homes to large apartment-style complexes. Levels of care and services also vary. Assisted living facilities allow people to remain relatively independent.
Washing oneself by sponge bath or in the bathtub or shower. One of the six Activities of Daily Living (ADLs)
Insurance companies use benefit triggers as criteria to determine when you are eligible to receive benefits. The most common benefit triggers for long-term care insurance are:
- Needing help with two or more Activities of Daily Living
- Having a Cognitive Impairment such as Alzheimer's Disease
Monetary sum paid by an insurance company to a recipient or to a care provider for services that the insurance policy covers.
(also called Group Home) Residential private homes designed to provide housing, meals, housekeeping, personal care services, and supports to frail or disabled residents. At least one caregiver is on the premises at all times. In many states, Board and Care Homes are licensed or certified and must meet criteria for facility safety, types of services provided, and the number and type of residents they can care for. Board and Care Homes are often owned and managed by an individual or family involved in their everyday operation.
A caregiver is anyone who helps care for an elderly individual or person with a disability who lives at home. Caregivers usually provide assistance with activities of daily living and other essential activities like shopping, meal preparation, and housework.
Special tax-exempt irrevocable trust written to comply with federal tax laws and regulations. You transfer cash or assets into the trust and may receive some income from it for life or a specified number of years (not to exceed 20). The minimum payout rate is 5 percent and the maximum is 50 percent. At your death, the remaining amount in the trust goes to the charity that you designated as part of the trust arrangement.
Having a long-lasting or recurrent illness or condition that causes you to need help with Activities of Daily Living and often other health and support services. The condition is expected to last for at least 90 consecutive days. The term used in tax-qualified long-term care insurance policies to describe a person who needs long-term care because of an inability to do a certain number of Activities of Daily Living without help, or because of a severe cognitive impairment such as Alzheimer's Disease.
Deficiency in short or long-term memory, orientation to person, place and time, deductive or abstract reasoning, or judgment as it relates to safety awareness. Alzheimer's Disease is an example of a cognitive impairment.
Spouse of a nursing home resident applying for or receiving Medicaid long-term care services.
Services and service settings in the community, such as adult day services, home delivered meals, or transportation services. Often referred to as home- and community-based services, they are designed to help older people and people with disabilities stay in their homes as independently as possible.
Ability to maintain control of bowel and bladder functions, or when unable to maintain control of these functions, the ability to perform associated personal hygiene such as caring for a catheter or colostomy bag. This is one of the six Activities of Daily Living.
Retirement complex that offers a range of services and levels of care. Residents may move first into an independent living unit, a private apartment, or a house on the campus. The CCRC provides social and housing-related services and often also has an assisted living unit and an on-site or affiliated nursing home. If and when residents can no longer live independently in their apartment or home, they move into assisted living or the CCRC's nursing home.
Assets whose value is counted in determining financial eligibility for Medicaid. They include:
- Vehicles other than the one used primarily for transportation
- Life insurance with a face value over $1,500
- Bank accounts and trusts
Your home provided that your spouse or child does not live there and its equity value is greater than $500,000 ($750,000 in some states)
Combination of rescue breathing (mouth-to-mouth resuscitation) and chest compressions used if someone isn't breathing or circulating blood adequately. CPR can restore circulation of oxygen-rich blood to the brain.
(also called personal care) Non-skilled service or care, such as help with bathing, dressing, eating, getting in and out of bed or chair, moving around, and using the bathroom.
Deterioration of mental faculties due to a disorder of the brain.
For Medicaid eligibility purposes, a disabled person is someone whose physical or mental condition prevents him or her from doing enough work or the type of work needed for self-support. The condition must be expected to last for at least a year or be expected to result in death. Persons receiving disability benefits through Supplemental Security Income (SSI), Social Security, or Medicare automatically meet this criterion.
Written order from a doctor that resuscitation should not be attempted if a person suffers cardiac or respiratory arrest. A DNR order may be instituted on the basis of an Advance Directive from a person, or from someone entitled to make decisions on the person's behalf, such as a health care proxy. In some jurisdictions, such orders can also be instituted on the basis of a physician's own initiative, usually when resuscitation would not alter the ultimate outcome of a disease. Any person who does not wish to undergo lifesaving treatment in the event of cardiac or respiratory arrest can get a DNR order, although DNR orders are more common when a person with a fatal illness wishes to die without painful or invasive medical procedures.
Putting on and taking off all items of clothing and any necessary braces, fasteners, or artificial limbs. This is one of the six Activities of Daily Living.
Legal document that gives someone else the authority to act on your behalf on matters that you specify. The power can be specific to a certain task or broad to cover many financial duties. You can specify if you want the power to start immediately or upon mental incapacity. For the document to be valid, you must sign it before you become disabled.
Feeding oneself by getting food into the body from a receptacle or by a feeding tube or intravenously. It is one of the six Activities of Daily Living.
(also known as a Deductible Period or Benefit Waiting Period) Specified amount of time at the beginning of a disability during which you receive covered services, but the policy does not pay benefits. A Service Day Deductible Period is satisfied by each day of the period on which you receive covered services. A Calendar Day or Disability Day Deductible Period doesn't require that you receive covered services during the entire deductible period, but only requires that you meet the policy's benefit triggers during that time period.
Fair market value of property minus any liabilities on the property such as mortgages or loans.
Process by which Medicaid recovers an amount of money from the estate of a person who received Medicaid. The amount Medicaid recovers cannot be greater than the amount it contributed to the person's medical care.
(also called Non-countable Assets) Assets whose value is not counted in determining financial eligibility for Medicaid. They include:
- Personal belongings
- One vehicle
- Life insurance with a face value under $1,500
Your home provided that your spouse or child lives there and its equity value is less than $500,000 ($750,000 in some states)
Income standard that the federal government issues annually that reflects increases in prices, measured by the Consumer Price Index.
Assessment of a person's available income and assets to determine if he or she meets Medicaid eligibility requirements.
Assessment of a person's care needs to determine if he or she meets Medicaid eligibility requirements for payment of long-term care services. The assessment may include a person's ability to perform Activities of Daily Living or the need for skilled care.
You must be:
- A resident of the state in which you are applying
- Either a United States citizen or a legally admitted alien
- Age 65 or over
- Or meet Medicaid's rules for disability, or blind
(also called Board and Care Home) Residential private homes designed to provide housing, meals, housekeeping, personal care services, and supports to frail or disabled residents. At least one caregiver is onsite at all times. In many states, group homes are licensed or certified and must meet criteria for facility safety, types of services provided, and the number and type of residents they can care for. Group homes are often owned and managed by an individual or family involved in their everyday operation.
Legal document in which you name someone to make health care decisions for you if, for any reason and at any time, you become unable to make or communicate those decisions for yourself.
Blood pressure is the force of blood pushing against your blood vessel walls. High blood pressure is when that force, as measured by a blood pressure cuff, is elevated above normal limits.
Licensed Homemaker Services provides "hands-off" care such as helping with cooking and running errands. Often referred to as "Personal Care Assistants" or "Companions." This is the rate charged by a non-Medicare certified, licensed agency.
Help with general household activities such as meal preparation, routine household care, and heavy household chores such as washing floors or windows or shoveling snow.
Short-term, supportive care for individuals who are terminally ill (have a life expectancy of six months or less). Hospice care focuses on pain management and emotional, physical, and spiritual support for the patient and family. It can be provided at home or in a hospital, nursing home, or hospice facility. Medicare typically pays for hospice care. Hospice care is not usually considered long-term care.
Inability to maintain control of bowel and bladder functions as well as the inability to perform associated personal hygiene such as caring for a catheter or colostomy bag. Continence is one of the six Activities of Daily Living.
Any person who provides long-term care services without pay.
Activities that are not necessary for basic functioning, but are necessary in order to live independently. These activities may include:
- Doing light housework
- Preparing and cleaning up after meals
- Taking medication
- Shopping for groceries or clothes
- Using the telephone
- Managing money
- Taking care of pets
- Using communication devices
- Getting around the community
- Responding to emergency alerts such as fire alarms
(Also called Health Care Directive, Advanced Health Care Directive, Living Will, or Health Care Directive) Legal document that specifies whether you would like to be kept on artificial life support if you become permanently unconscious or are otherwise dying and unable to speak for yourself. It also specifies other aspects of health care you would like under those circumstances.
Services and supports necessary to meet health or personal care needs over an extended period of time.
(Also called Long Nursing Home or Convalescent Care Facility) Licensed facility that provides general nursing care to those who are chronically ill or unable to take care of daily living needs.
Insurance policy designed to offer financial support to pay for long-term care services.
Services that include medical and non-medical care for people with a chronic illness or disability. Long-term care helps meet health or personal needs. Most long-term care services assists people with Activities of Daily Living, such as dressing, bathing, and using the bathroom. Long-term care can be provided at home, in the community, or in a facility. For purposes of Medicaid eligibility and payment, long-term care services are those provided to an individual who requires a level of care equivalent to that received in a nursing facility.
Five-year period prior to a person's application for Medicaid payment of long-term care services. The Medicaid agency determines if any transfers of assets have taken place during that period that would disqualify the applicant from receiving Medicaid benefits for a period of time called the penalty period.
Joint federal and state public assistance program for financing health care for low-income people. It pays for health care services for those with low incomes or very high medical bills relative to income and assets. It is the largest public payer of long-term care services.
Legal document that allows you to name someone to make health care decisions for you if, for any reason and at any time, you become unable to make or communicate those decisions for yourself.
Federal program that provides hospital and medical expense benefits for people over age 65, or those meeting specific disability standards. Benefits for nursing home and home health services are limited.
(Also called Medigap coverage) Private insurance policy that covers gaps in Medicare coverage.
(Also called Medicare Supplement Insurance) Private insurance policy that covers gaps in Medicare coverage.
Membership organization of state insurance commissioners. One of its goals is to promote uniformity of state regulation and legislation related to insurance.
(Also called exempt assets) Assets whose value is not counted in determining financial eligibility for Medicaid. They include:
- Personal belongings
- One vehicle
- Life insurance with a face value under $1,500
- Your home provided that your spouse or child lives there and its equity value is less than $500,000 ($750,000 in some states)
(Also called Long-Term Care Facility or Convalescent Care Facility) Licensed facility that provides general nursing care to those who are chronically ill or unable to take care of daily living needs.
Bone disease characterized by a reduction in bone density. Bones become porous and brittle as a result of calcium loss. People with osteoporosis are more vulnerable to breaking bones.
Private long-term care insurance policy that allows you to keep some or all of your assets if you apply for Medicaid after using up your policy's benefits. The Deficit Reduction Act of 2005 allows any state to establish a Partnership Program. Under a Partnership policy, the amount of Medicaid spend-down protection you receive is generally equal to the amount of benefits you received under your private Partnership policy. (State-specific program designs vary.)
(also called custodial care) Non-skilled service or care, such as help with bathing, dressing, eating, getting in and out of bed or chair, moving around, and using the bathroom.
Temporary care, which is intended to provide time off for those who care for someone on a regular basis. Respite care is typically 14 to 21 days of care per year and can be provided in a nursing home, adult day service center, or at home by a private party.
Type of loan based on home equity that enables older homeowners (age 62 or older) to convert part of their equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. Instead of making monthly payments to a lender, as you do with a regular mortgage, a lender makes payments to you. The loan, along with financing costs and interest on the loan, does not need to be repaid until the homeowner dies or no longer lives in the home.
Nursing care such as help with medications and caring for wounds, and therapies such as occupational, speech, respiratory, and physical therapy. Skilled care usually requires the services of a licensed professional such as a nurse, doctor, or therapist.
Services requiring the supervision and care of a nurse or physician, such as assistance with oxygen, maintenance of a feeding tube, or frequent injections.
Requirement that an individual spend most of his or her income and assets to pay for care before he or she can satisfy Medicaid's financial eligibility criteria.
Long-term care service for people with memory or orientation problems. Supervision ensures that people don't harm themselves or others because their memory, reasoning, and orientation to person, place, or time are impaired.
Program administered by the Social Security Administration that provides financial assistance to needy persons who are disabled or aged 65 or older. Many states provide Medicaid without further application to persons who are eligible for SSI.
Giving away property for less than it is worth or for the sole purpose of becoming eligible for Medicaid. Transferring assets during the look back period results in disqualification for Medicaid payment of long-term care services for a penalty period.
Moving into and out of a bed, chair, or wheelchair. Transferring is one of the six Activities of Daily Living.
Medicare, Medicaid & More
of public programs, including Medicare and Medicaid, may help pay for some long-term care services under certain circumstances. However, each program has specific rules about what services are covered, how long you can receive benefits, whether or not you qualify for benefits, and how much you have to pay in out-of-pocket costs. To accurately plan for your long-term care needs, it is very important to know the facts about what may or may not be covered, and to stay current on program changes.
Medicare only covers medically necessary care and focuses on medical acute care, such as doctor visits, drugs, and hospital stays. Medicare coverage also focuses on short-term services for conditions that are expected to improve, such as physical therapy to help you regain your function after a fall or stroke. (In January of 2013 a lawsuit (Jimmo v. Sebelius) regarding the Medicare Improvement Standard was settled. The Settlement may result in changes to this requirement.)
Medicare pays for health care for people age 65 years and older, people under age 65 with certain disabilities, and people of all ages with end-stage renal disease (permanent kidney failure that requires dialysis or a kidney transplant).
Long-term Care Services – Skilled Nursing
Medicare does not pay the largest part of long-term care services or personal care—such as help with bathing, or for supervision often called custodial care. Medicare will help pay for a short stay in a skilled nursing facility, for hospice care, or for home health care if you meet the following conditions:
- You have had a recent prior hospital stay of at least three days
- You are admitted to a Medicare-certified nursing facility within 30 days of your prior hospital stay
- You need skilled care, such as skilled nursing services, physical therapy, or other types of therapy
If you meet all these conditions, Medicare will pay for some of your costs for up to 100 days. For the first 20 days, Medicare pays 100 percent of your costs. For days 21 through 100, you pay your own expenses up to $140.00 per day (as of 2013), and Medicare pays any balance. You pay 100 percent of costs for each day you stay in a skilled nursing facility after day 100.
Long-term Care Services – Home and Other Care Services
In addition to skilled nursing facility services, Medicare pays for the following services for a limited time when your doctor says they are medically necessary to treat an illness or injury:
- Part-time or intermittent skilled nursing care
- Physical therapy, occupational therapy, and speech-language pathology that your doctor orders that a Medicare-certified home health agency provides for a limited number of days only
- Medical social services to help cope with the social, psychological, cultural, and medical issues that result from an illness. This may include help accessing services and follow-up care, explaining how to use health care and other resources, and help understanding your disease
- Medical supplies and durable medical equipment such as wheelchairs, hospital beds, oxygen, and walkers. For durable medical equipment, you pay 20 percent of the Medicare approved amount
There is no limit on how long you can receive any of these services as long as they remain medically necessary and your doctor reorders them every 60 days.
Medicare covers hospice care if you have a terminal illness and are not expected to live more than six months. If you qualify for hospice services, Medicare covers drugs to control symptoms of the illness and pain relief, medical and support services from a Medicare-approved hospice provider, and other services that Medicare does not otherwise cover, such as grief counseling. You may receive hospice care in your home, in a nursing home(if that is where you live), or in a hospice care facility. Medicare also pays for some short-term hospital stays and inpatient care for caregiver respite.
State Medicaid Programs
Medicaid is a joint federal and state government program that helps people with low income and assets pay for some or all of their health care bills. It covers medical care, like doctor visits and hospital costs, long-term care services in nursing homes, and long-term care services provided at home, such as visiting nurses and assistance with personal care. Unlike Medicare, Medicaid does pay for custodial care in nursing homes and at home.
Overall program rules for who can be eligible for Medicaid and what services are covered are based on federal requirements, but states have considerable leeway in how they operate their programs. States are required to cover certain groups of individuals, but have the option to cover additional groups. Similarly, states are required to cover certain services, but have the option of covering additional services if they wish to do so. As a result, eligibility rules and services that are covered vary from state to state.
To be eligible for Medicaid you must meet certain requirements, including having income and assets that do not exceed the levels used by your state. The section on “Medicaid Eligibility”, which you can go to by clicking on the link below, provides more detailed information about how to become eligible for Medicaid.
Once your state determines that you are eligible for Medicaid, the state will make an additional determination of whether you qualify for long-term care services. When determining whether you qualify for long-term care services, most states use a specific number of personal care and other service needs to qualify for nursing home care or home and community-based services. There may be different eligibility requirements for different types of home and community-based services.
Medicaid Long-Term Care Services
Medicaid covers nursing home services for all eligible people age 21 and older. Medicaid also covers home and community-based services for people who would need to be in a nursing home if they did not receive the home care services. In most states, Medicaid will also cover services that will help you remain in your home, such as personal care services, case management, and help with laundry and cleaning. Medicaid will not pay for your rent, mortgage, utilities, or food. Check to see whether your state Medicaid program offers alternatives to nursing home care services.
It is important to understand that Medicaid programs and eligibility for services vary from state to state. Services that may be available to you in one state may not be available in another. For example, some states cover assisted living services, while others do not. Contact your state Medicaid office to learn more about your state’s programs and eligibility requirements.
To be eligible for Medicaid, you must meet the requirements for an eligibility group that your state covers under its Medicaid program. We can define an “eligibility group” as people who have certain common characteristics, such as being aged or disabled, and who meet certain common requirements, such as having income and assets below certain levels. There are many different eligibility groups in the Medicaid program, and each one has its own set of requirements. States are required to cover some groups, but have the option to cover or not cover others.
Regardless of the specific eligibility group, though, you must meet two types of requirements to qualify for Medicaid.
- General requirements
- Financial requirements
General Medicaid Requirements
There are many pathways to being eligible for Medicaid. For example, most states provide Medicaid to anyone who is receiving benefits under the Supplemental Security Income (SSI)program. A number of states provide Medicaid to aged or disabled persons with income that is below 100 percent of the federal poverty level ($931 a month for an individual in 2012).
For the most part, to be eligible for Medicaid you must be one of the following:
- Be age 65 or older
- Have a permanent disability as that term is defined by the Social Security Administration
- Be blind
- Be a pregnant woman
- Be a child, or the parent or caretaker of a child
In addition you must meet certain other requirements, such as:
- Be a U.S. citizen or meet certain immigration rules
- Be a resident of the state where you apply
- Have a Social Security number
There are two particular pathways, or groups, that you should be aware of because they are the ones most commonly used to make people eligible for Medicaid long-term care services. These groups are the special income level group, and the medically needy.
To be eligible for Medicaid, you must have limited income and assets.
The amount of income you can have varies by state, and also varies depending on which eligibility groups each state covers. When the state determines your financial eligibility for Medicaid, the state will count some of your income, but not all of it. Your income includes these sources:
- Regular benefit payments such as Social Security retirement or disability payments
- Veterans benefits
- Interest from bank accounts and certificates of deposit
- Dividends from stocks and bonds
However, Medicaid generally does not count such things as:
- Nutritional assistance such as food stamps
- Housing assistance provided by the federal government
- Home energy assistance
- Some of your earnings if you have earned income from work you do
Medicaid will count payments to which you are entitled even if you don’t receive all of the payment. For example, if you have earnings from which income taxes are withheld, Medicaid will count the entire amount of your earnings, including the amount that is withheld for taxes. If you and your spouse receive joint payments, such as rental income, the state allocates half to you and half to your spouse.
Special Income Level Group
The special income level group is an optional group for states, meaning that states can choose to cover or not cover this group. Over 40 states have chosen to cover this group, though, so it is widely available as a pathway to receiving long-term care services under Medicaid. This is an important group for you to know about because it is aimed specifically at people who need long-term care services.
To be eligible under this group a person must meet the general eligibility requirements, such as being aged, blind or disabled. The person must also be in an institution such as a nursing home for at least 30 consecutive days.
The amount of income a person can have is quite high, up to $2,130 a month in 2013. That is three times higher than the amount of income a person can have ($710 a month in 2013) and be eligible for Medicaid because he or she is receiving SSI benefits. The amount of countable assets a person can have is similar to other pathways, about $2,000 for an individual.
Once a state has determined that someone is eligible under the special income level group, eligibility starts at the beginning of the 30 days the person must be in an institution. That means that Medicaid can pay for all of the care you receive from the beginning of your stay in the nursing home.
Although the special income level group is aimed at people who are in institutions such as nursing homes, states can use the same rules to make people eligible for home and community-based services. This means that people with higher incomes can get long-term care services while still living in their own homes.
Because the amount of income you can have under the special income level group is higher than other pathways to Medicaid eligibility, you may be required to pay for part of your long-term care services out of your own income. See the section titled “Share of Cost” for more information about this.
Like the special income level group, coverage of the medically needy is an option for states. Thirty-three states choose to cover the medically needy, which is not as many as cover the special income level group. But, this is still an important group for you to know about because in states which cover the medically needy, people with high incomes and high medical expenses can still be eligible for Medicaid long-term care services.
People who are eligible as medically needy have too much income to qualify for Medicaid through any other pathway. But, they can still qualify for Medicaid as medically needy by “spending down” the income that is above their state’s income limit.
Spending Down to Become Eligible as Medically Needy
A person spends down his or her excess income to the state’s medically needy limit by incurring medical expenses, such as doctor visits, prescription drugs, or anything else the state considers to be medical or remedial care. It is important to understand that the person does not actually have to pay an expense for it to count as an incurred expense. The person only has to incur the obligation to pay the expense.
The medical expenses the person has incurred are then subtracted from his or her income. If the remaining income does not exceed the state’s income limit, the person is eligible as medically needy.
The medically needy income limit varies considerably from state to state. In most of the states that cover the medically needy, the income limit for an individual is less than $500 a month.
As an example of how this works, Mr. George has income of $1,000, which is too high to qualify for Medicaid in his state unless he can qualify as medically needy. His state has a medically needy income limit of $400 a month. That means Mr. George has a spenddown liability, or spenddown amount, of $600, which is the difference between his income and the state’s income limit.
But, Mr. George also has incurred medical expenses of $600. The state will subtract that $600 in medical bills from his $1,000 in income, leaving him with $400 in countable income for the month. Since his countable income is no higher than the state’s income limit of $400, Mr. George can be eligible for Medicaid as medically needy.
For a person with high income, the spenddown liability can be considerable. But, a person receiving long-term care services, particularly as an inpatient in a nursing home, can incur enough expenses very quickly because nursing home care is very expensive.
It is important to understand that even though Mr. George is now eligible for Medicaid, the program will only pay for the medical care he receives after he has met his spenddown liability. In our example, Mr. George’s spenddown liability is $600. Medicaid cannot pay that $600 on behalf of Mr. George. However, Medicaid will pay for medical care beyond that $600.
Income-Only or Miller Trusts
In states that do not have an Medically Needy Program, Medicaid applicants often use a trust to effectively lower their countable income below the state limit. Income-only trusts, often called Miller trusts, are trusts that can be established by or for a person of any age, regardless of whether the person is disabled. The trust can be funded only with the person’s income, such as Social Security benefits, pensions, etc. It cannot be funded with assets such as money from a bank account or the sale of stocks or bonds. And, like a special needs trust or pooled trust, a Miller trust must contain a clause that says that upon the death of the person for whom the trust is established, any funds remaining in the trust must be paid to the state Medicaid program, up to the amount the program paid for services on behalf of the person.
Not all states recognize Miller trusts. If your state covers nursing home care for the medically needy, the state will not recognize a Miller trust. However, the other two trusts we described are recognized in all states.
Financial Requirements – Assets
When the state determines your financial eligibility for Medicaid some of your assets are counted, while others are excluded. During the Medicaid application process, you will have to provide documentation of what assets you have. While Medicaid’s assessment of your income is relatively straightforward, the assessment of your assets can be fairly complex, depending on how much and what kind of assets you have.
Assets that are usually counted for eligibility include:
- Checking and savings accounts
- Stocks and bonds
- Certificates of deposit
- Real property other than your primary residence
- Additional motor vehicles if you have more than one.
Assets that do not get counted for eligibility include the following:
- Your primary residence
- Personal property and household belongings
- One motor vehicle
- Life insurance with a face value under $1,500
- Up to $1,500 in funds set aside for burial
- Certain burial arrangements such as pre-need burial agreements
- Assets held in specific kinds of trusts. See “Trusts” for more information about how a trust can affect your eligibility for Medicaid.
Limits on Home Equity
When determining eligibility for Medicaid your home, regardless of its value, is exempt from being counted as a resource as long as it is your principal place of residence. But, your home can affect whether Medicaid will pay for your long-term care services, including nursing home care and home and community-based waiver services.
If your equity interest in the home exceeds a certain level, Medicaid cannot pay for your long-term care. The equity value of your home is the fair market value (that is, what you could sell it for on the open market) minus any debts secured by the home, such as a mortgage or a home equity loan. For example, if your home has a fair market value of $300,000 and an outstanding mortgage of $100,000, the equity value is $200,000.
But your equity interest, which is what is important, depends on whether you own the home by yourself or with someone else. In our example, if you own the home by yourself, your equity interest is the entire equity value of $200,000. If you own your home jointly with your spouse or someone else, though, your equity interest is only half of the home’s equity value, or $100,000.
In 2013, the minimum home equity limit is $536,000. In other words, your must have more than $536,000 in equity interest in your home before Medicaid must deny payment for your long-term care services. However, states have the option of using a higher limit, which can be as high as $802,000 in 2013. Most states have chosen to use the lower limit but some states, especially in parts of the country where housing is expensive, use the higher amount. These limits are adjusted each year to account for inflation.
There are some exceptions to this rule. If your spouse or your child who is under 21 or blind or disabled lives in the home, this rule does not apply. Also, the state can choose not to apply this rule if it determines that applying the rule would be an undue hardship.
Other Important Considerations:
- Unless specifically excluded any other real property, such as a vacation home, that you and your spouse own is counted as an asset in the Medicaid eligibility determination
- The full value of an asset that you own jointly with someone else may be counted as belonging entirely to you when the state determines your Medicaid eligibility. For example, a jointly owned checking or savings account would be considered to be entirely your asset since either you or the other owner can withdraw all of the funds in the account.
- The amount of countable assets you can have and still qualify for Medicaid varies from state to state. In most states you can retain about $2,000 in countable assets, and married couples who are still living in the same household can retain about $3,000 in countable assets. This may not sound like much, but remember that many assets are not counted at all when determining your eligibility.
- If one spouse lives in an institution and the other lives in the community, the community spouse is allowed to keep more of the couple’s assets without disqualifying the spouse in the institution from Medicaid coverage. In addition, the community spouse may be able to have some of the institutionalized spouse’s income set aside for his or her use. See “Considerations for Married People” for more information about how income and assets can be protected for a community spouse.
Considerations For Married People
As we mentioned in the section on assets the asset limit in most states is about $2,000 for an individual, and $3,000 for a couple when both spouses are living together. But, if one spouse is in an institution such as a nursing home and the other spouse is still living on the community, different rules apply. These rules are commonly known as the spousal impoverishment rules.
The spousal impoverishment rules are designed to keep the spouse living in the community from becoming impoverished when the other spouse enters a nursing home. Without the spousal impoverishment rules, the state would consider a couple’s jointly owned assets to belong entirely to the institutionalized spouse when the state determines that spouse’s eligibility for Medicaid. And, most of the couple’s income might have to be used to help pay for the cost of the institutionalized spouse’s nursing home care, leaving little or nothing for the spouse in the community to live on.
Under the spousal impoverishment rules, though, the community spouse is allowed to keep a portion of the couple’s assets. That portion is usually one-half of the couple’s combined assets, up to a maximum of $115,920 in 2013. In about half of the states, if the couple has less than that in total assets the community spouse can keep all of the couple’s assets.
In addition to assets, the spousal impoverishment rules provide that at least some of the institutionalized spouse’s income can be protected for the community spouse to use. This helps ensure that the community spouse will have income to pay for living expenses. In 2013, the maximum amount of the institutionalized spouse’s income that can be protected for the community spouse is $2,898 a month. However, in deciding how much income to protect, the state will take into consideration any other income the community spouse has.
Share Of Cost
Depending on how much income they have, people in nursing homes and even some receiving home and community-based services may have to pay part of the cost of the care they receive themselves. This is known as share of cost, or by the more complicated name of post-eligibility treatment of income. To keep this as simple as possible we will use the term “share of cost”.
There are two reasons why you may be required to pay for part of the cost of your care.
One is that when you are in a nursing home, almost everything you need is provided for you. In addition to medical care you receive food and shelter, and if you are eligible for Medicaid the program pays for that through its reimbursement to the nursing home. In other words, you have very little in the way of living expenses because Medicaid is paying for everything in the nursing home.
The second reason is that in most states a person with high income can still be eligible for Medicaid if the person is in a nursing home. As we explain in the section on the special income level group, the income limit for that group can be as high as $2,130 a month in 2013. If you are living in the community you must spend much of your income on things like shelter, food, and utilities. But, if you are in a nursing home, you do not have to pay for these things because the nursing home provides them and they are paid for by Medicaid. This means that if you are in a nursing home and have high income, you may have “extra” income that you are not using for anything.
Medicaid deals with this extra income by requiring you to help pay for part of the cost of your care in the nursing home. The state determines how much extra income you have by starting with your total income and then deducting certain items and expenses. Some things that are deducted are a small allowance for personal needs, an amount to take care of the needs of a spouse or children who may still be living at home, and an allowance to maintain your home if you have one. Whatever is left after all of the deductions is considered to be extra income, and that is your share of cost, or the amount you are expected to pay for your care. If nothing is left after all of the deductions, you do not have any share of cost.
The state takes your share of cost into account when it pays the nursing home. It does this by subtracting your share of cost from the nursing home payment. For example, if your share of cost is $300, the state reduces its payment to the nursing home by that amount. The nursing home will then ask you or your family for payment of your $300 share of cost.
Share of cost can also apply if you have high income and receive home and community-based services. But, instead of a small allowance for personal needs, you would have a much larger maintenance needs allowance. That is because a person receiving home and community-based services has the same expenses as anyone else living in the community. A number of states do not require people receiving home and community-based services to pay any share of cost. Instead, they allow those people to keep all of their income to pay for their living expenses in the community.
A medical specialist (nurse/social worker) in your state must evaluate your needs and decide if you need long-term care services. Usually, the specialist will make the decision based in part on whether you need assistance performing certain activities of daily living (ADL), such as:
- Using the toilet
- Transferring to or from a bed or chair
- Caring for incontinence
target="_blank" title="Click to view an example of a form to assess limitations in Activities of Daily Living (Colorado)">This link provides an example (state of Colorado) of the kind of form frequently used by State Medicaid programs to assess limitations in Activities of Daily Living.
GOOD TO KNOW
If you do not meet Medicaid’s functional eligibility criteria, Medicaid will not cover long-term care services, regardless of financial eligibility. But, if you meet the general and financial requirements for eligibility, Medicaid will still cover other services such as doctor visits and prescription drugs.
Applying For Medicaid
Although Medicaid is a joint federal and state program the states operate the program on a day-to-day basis, including taking applications and making determinations of eligibility. That means you must contact a local office in your state to apply forMedicaid.
To apply for Medicaid you will have to:
- Fill out an application form
- Provide documentation to verify general and financial requirements
You may apply for Medicaid coverage yourself, or you may designate another person, such as a family member, your attorney, or a friend, to apply for you. If someone else apples for you, that person should be familiar with your situation, be able to answer all eligibility questions, and have access to your financial records. The state may also require a face-to-face interview.
If you own a home, the state may ask you to document the current fair market value of the home and any loans for the home, such as mortgages or equity loans. The state may ask for these documents:
- A current tax bill
- A real estate appraisal
- Copies of your mortgage
The state may ask for this documentation because, while your home is not counted as an asset when determining your eligibility for Medicaid, how much equity you have in your home can affect whether Medicaid will pay for your long-term care services. See the section on “Limits on Home Equity” for more information about this.
If the value of your assets went down a lot within the past five years, the state may ask you to explain what happened to the assets. In particular, the state will want to know whether you gave away any of your assets in the past five years.
If you are married and in a nursing home, you will also be asked to document your assets when you first entered the nursing home—this can help establish how much of your assets your spouse is able to keep. See the section on “Considerations for Married People” for more information about this.
Where to Apply for Medicaid:
All states have local Medicaid eligibility offices where you can file applications. Many states also provide applications at different locations in your community, including Aging and Disability Resource Centers (ADRCs). Your can also apply by phone by calling your local Medicaid office. In most states, you can also apply online, or find an application online that you can complete and mail to the local office.
When to apply for Medicaid:
The best time to apply depends on your medical situation, your marital status, and the complexity of your finances. If your finances are straightforward, the state may be able to process your application faster. If you find that you need long-term care, you should apply as soon as possible because it may take some time for the state to process your application and make an eligibility determination. For the most part, the date you become eligible is based on the date you apply for Medicaid, assuming you meet all of the eligibility requirements when you apply. The longer you wait to apply, then, the later your date of eligibility will be.
The Medicaid agency usually has 45 days to process your application. If the application requires a disability determination, the agency can take 90 days. But, it may take longer for the state to determine your eligibility if you do not provide the required documents on time. If Medicaid thinks that you are not cooperating, it can deny your application for failing to cooperate. If this happens, you may have to start your application over again once you have your documents in hand. This will delay the date you become eligible for Medicaid even longer.
If the Medicaid agency determines that you are eligible, you will receive a letter with your date of eligibility and the amount you must pay toward the cost of your care. This could be your spenddown liability if you are eligible as medically needy, or your share of cost if you are eligible on some other basis. See the sections on “Medically Needy – Spenddown” and “Share of Cost” for more information about this.
Medicaid will review your eligibility status every year. During the yearly review, you may need to document your income and assets again, especially if either your income or assets have changed much in the last year. The review process is usually simpler than the original application process.
If the Medicaid agency determines that you are not eligible, you will receive a letter that explains the reason for denial. The notice will also explain how you can appeal the decision.
Medicaid Estate Recovery
If you receive Medicaid coverage for long-term care services, federal law requires states to recover the amount Medicaid spent on your behalf from your estate after you die. Your state’s probate law generally defines what an estate includes, but for the most part it includes all of the real and personal property you own when you die, such as your home and other assets. The state is required to recover the cost of long-term care services, including nursing home care and home and community-based services. But, states can choose to recover the cost of all the services Medicaid paid for if they wish to do so.
Estate recovery happens after the death of a Medicaid recipient who was either permanently institutionalized or age 55 and older when he or she received Medicaid services. Some estates are exempt from estate recovery. For example, if your spouse is still alive, your estate is exempt from recovery. In these cases, states may recover from the spouse’s estate after his or her death. Your heirs can also seek a hardship waiver from estate recovery.
Veterans Affairs Benefits
The Department of Veterans Affairs (VA) pays for long-term care services for service-related disabilities and for certain other eligible veterans, as well as other health programs such as nursing home care and at-home care for aging veterans with long-term care needs.
The VA also pays for veterans who do not have service-related disabilities, but who are unable to pay for the cost of necessary care. Co-pays may apply depending on the veteran’s income level.
The VA has two more programs to help veterans stay in their homes:
- The Housebound Aid and Attendance Allowance Program. This program provides cash to eligible veterans with disabilities and their surviving spouses to purchase home and community-based long-term care services such as personal care assistance and homemaker services. The cash is a supplement to the eligible veteran’s pension benefits
- A Veteran Directed Home and Community Based Services program (VD-HCBS). This program was developed in 2008 for eligible veterans of any age. The program provides veterans with a flexible budget to purchase services. Counseling and other supports for veterans are provided by the Aging Network in partnership with the Veterans Administration
Visit the Department of Veterans Affairs to view available programs and services or download a Veterans Benefits fact sheet. You can call the VA at 800-827-1000 to obtain information about services available in your area.
Other State Programs
Many states have programs to pay for home and community-based long-term care services for older adults, generally 60 and older, and their families. States often draw on funds from county, state and federal sources such as the Older Americans Act. The focus of these programs is to help older adults remain in the community as independently as possible. States administer these services through state and local agency networks known as the Aging Network, and include:
- Nutrition programs such as home-delivered meals for homebound elderly or meals served in community settings
- Transportation services
- Health promotion services to help prevent disease or manage chronic illnesses
- Personal care assistance and help with household chores and shopping
- Legal assistance and services that protect the rights of older persons such as the long-term care ombudsman program
- Family caregiver services and supports including time off from their responsibility, called respite care
While the financial eligibility criteria for these programs differ by state and by program, they are generally targeted for low-income, frail seniors over age 60, minority older adults, and seniors living in rural areas. Specific funds are often set a side for Native American older adults.
Local agencies, called Area Agencies on Aging (AAAs), work with State Units on Aging (SUAs) to plan and develop service and support programs based on the needs of older adults and families. More information on how to connect with your local Area Agency on Aging is available on the Administration for Community Living website.
There are several databases available to you to locate services in your state:
Aging and Disability Resource Centers (ADRCs)
Where available, each state in the map links to a long-term care resource database maintained by that state for its ADRC. These centers serve as single points of entry into the long-term supports and services system for older adults and people with disabilities.
The Eldercare Locator provides information and links to resources that enable older persons to live independently in their communities. This public service website links to state and local Area Agencies on Aging and community-based organizations that serve older adults and their caregivers.
Centers for Independent Living (CILs)
CILs provide access to resources for people with disabilities that empower individuals to live independently in their communities. Independent Living Research Utilization (ILRU) provides a national database of centers for independent living, and statewide independent living councils. It is updated weekly.
Where You Live Matters
In thinking about long-term care it is important to consider where you will live as you age and how your place of residence can best support your needs should you become unable to fully care for yourself. The following questions will be answered in this section:
- What steps can I take to stay in my home?
- What are my options for living in an aging-oriented facility?
Staying In Your Home
Most people prefer to stay in their own home for as long as possible. When planning to receive long-term care in your home there are many things to consider including:
- The condition of your home
- Whether it can be modified, if necessary, to accommodate a wheelchair or other devices/equipment
- The availability of long-term care services in your area, such as adult day care or nearby medical facilities
- How “aging-friendly” your community is—does it offer public transportation, home delivered meals and other needed services?
- Tax and legal issues
It’s wise to think now about how your current residence and community will support your needs as you age and require long-term care services.
In-home and community services can help you live at home longer. The following are some of the services and supports that may be available in your area:
- Convenient and affordable public transportation
- Someone to drive you on errands and to appointments
- Help with housing and yard chores
- Help with personal care
- Home Delivered Meals
- Senior Center where you can socialize and exercise
- Adult Day Care centers
GOOD TO KNOW
Contact your Area Agency on Aging to see what services are available in your community. Visit the Eldercare Locator or call 1-800-677-1116.
Typical Home Modifications
Modifications can make your home or apartment safer and allow you to stay there longer. An important component to staying at home is avoiding falls. One of the goals of home modification is to increase your chances of avoiding a fall, especially in the bathroom. Typical changes needed as you age include:
- Entryway ramps to accommodate wheelchairs or walkers
- Bathroom safety grip bars and walk-in or roll-in showers
- Medical alert system
- Lever style door and sink handles
- Improved lighting and night lighting
- Wider doorways for wheelchair access
- Stairway chair lifts
- Bathroom and bedroom on the first floor of a multi-story home to accommodate someone unable to climb stairs
- A separate apartment for a relative or renter in exchange for assistance when you need it
Do you qualify for financial help?
There may be state and local programs that provide low-interest loans or grants to help you pay for home modifications or home repairs. If you are age 60 or older, check with your local Area Agency on Aging to see whether you qualify for home modification and repair funds from Title III of the Older Americans Act.
Modifying your rented residence
You may need to talk with your landlord about the types of modifications you can make and whether you, or your landlord, will be responsible for the costs. Landlords are required to allow you to make reasonable modifications to accommodate your needs. If you have questions, consult your local Area Agency on Aging for more information.
Assistive devices are tools, products, or equipment that can help you perform daily tasks and activities independently in your home and community. Some of the simplest assistive devices are kitchen and self-care tools such as a reacher (a tool that helps you get objects that are out of your reach).
Other devices are designed to help you communicate, such as:
- Voice amplification tools
- Voice recognition tools
- Cueing and memory aids
- Software such as word prediction programs
Tools that help you move or walk are called mobility assistive devices and include walkers, wheelchairs, and scooters.
Living In A Facility
Housing with Services
If it becomes necessary, several types of housing come with support services. Primarily, these are:
- Public Housing for low-to-moderate income elderly and persons with disabilities. Typically assistance with services is provided by a staff person called a Service Coordinator
- Assisted Living or “board and care” homes are group living settings that offer housing in addition to assistance with personal care and other services, such as meals. Generally, they do not provide medical care
- Continuing Care Retirement Communities (CCRCs)provide a range of housing options, including independent living units, assisted living and nursing homes, all on the same campus. Nursing facilities, or nursing homes, are the most service-intensive housing option, providing skilled nursing services and therapies as needed.
When comparing these options, weigh how much they cost, what you can afford, and the range and quality of the services provided. Also compare the type of insurance or public programs that may help pay for these services, their eligibility requirements, and how close you will be to family and friends.
Housing for Aging and Disabled Individuals
The Federal Government and most states have programs that help pay for housing for older people with low or moderate incomes, less than $46,000 if single or $53,000 if married.
Usually you have to fill out an application, and there may be a waiting list. Some of these housing programs also offer help with:
Residents typically live in their own apartments within the complex. Usually a Federal or State agency will review your monthly income and expenses to see if you are eligible for this type of housing. Rent payments are usually a percentage of your income.
To find out more about subsidized housing in your area, visit the U.S. Department of Housing and Urban Development-Subsidized Housing website.
Assisted Living facilities come in many forms and variations. In 2011, there were 6,921 professionally managed assisted living facilities in the United States. In general, they provide room and board, social and recreational activities, and help with personal care and other activities of daily living. Residents pay for the cost of medical and nursing services separately. The following services are generally available: :
- Some help with Activities of Daily Living (ADLs) such as eating, bathing, and using the bathroom, taking medicine, and getting to appointments as needed (varies by facility).
- Residents often live in their own room or apartment within a building or group of buildings and have some or all of their meals together.
- Social and recreational activities are usually provided. Some assisted living facilities have health services on site.
- Residents usually pay a monthly rent and then pay additional fees for extra services they receive.
Costs for assisted living facilities can vary widely depending on the size of the living areas, services provided, type of help needed, and geographic location.
GOOD TO KNOW
In 2001, the typical cost for an assisted living facility ranged from $900 to $3,000 per month, but costs can be higher in urban areas or in upscale facilities.
Continuing Care Retirement Communities
A continuing care retirement community (CCRC) is a community living arrangement, typically on a single campus, that provides housing, health care, and social services. CCRCs offer different levels of services ranging from independent housing to nursing home care.
Joining a CCRC is a way of obtaining long-term care services more easily. You move into a CCRC as a resident of an independent housing unit where you can usually purchase and receive support services. When you need more care or are unable to live independently, you can move to the assisted living facility on campus. Should you need the next level of care, you can move into the on-site nursing home.
The fee arrangements for CCRCs vary and generally include both a monthly fee and an entrance fee. CCRCs charge a monthly fee based on the size of your independent living unit. Most CCRCs also charge a sizeable one-time entrance fee. In some cases the entrance fee is not refundable. In other cases the fee may be refundable under certain circumstances. If the fee is refundable it will be held by the CCRC. It is important for you to understand that if the fee you pay to the CCRC is refundable it will be counted as an available asset if you need to apply for Medicaid, even if you cannot get access to the money yourself.
More things to consider:
- Some allow you to hire your own home health care services while you live in an independent living unit. Others require you to be fully independent to remain in an independent living unit.
- They may require that you have a health screening before you can move into the independent living unit
- Some allow married couples to move into an independent living unit even if one spouse requires some care
How To Decide
As you age, you can feel better knowing there are steps you can take to ensure that your wishes, both medical and financial, are carried out the way that you want them. Advance care planning entails discussing your wishes, completing legal documents, and appointing a health care decision maker.
Having your decisions squared away and clear, so that there are no misunderstandings or second-guessing, can be the greatest gift you can give to your loved ones, and yourself. In this section we will answer the following questions:
- What considerations should I make when building my advance care plan?
- Will I need a lawyer?
- What legal steps should I take for my medical well-being?
- What legal steps should I take for my financial well-being?
Advance Care Plan Consideration
You should consider these questions as you plan:
- What are your values and beliefs? When developing an advance care plan, consider your concerns, values, spiritual beliefs, or your ideas about what makes life worth living. A variety of user-friendly publications and guides on advance health care are available at the American Bar Association.
- What do you want for yourself? Most people think about the way they wish to face death or disability but may be uncomfortable discussing these topics. Sometimes sharing your own ideas, if you are helping someone, or reviewing the situations of other family members or friends who have been in similar situations, can help
- Who do you want as your decision maker? Decide who should make decisions for you if you cannot. Choose someone who will understand and be able to carry out your wishes even if they include stopping life-sustaining treatment. You should also name a back-up agent to make decisions, in case the first person is not able to do so.
Will I Need A Lawyer?
Most people are unable to handle the complexity of planning their medical and financial futures on their own. Consulting an elder law attorney, who deals daily with the issues surrounding old age, can be the first step in the advance care planning process. Elder law attorneys can help you create a legal framework to ensure that your medical and financial wishes are fulfilled. Some general functions they perform are:
- Preparing Advance Medical Directives or “living wills” that clearly state what medical treatments you wish, or do not wish to receive if you can’t answer for yourself
- Preparing power of attorney documents, identifying the person you trust to make your decisions when you cannot
- Estate planning in the form of last wills and testaments and/ or “living trusts” that direct where your assets will go after your death
- Exploring your qualifications for Medicaid, and if appropriate, applying on your behalf
- Advocating, on your behalf, on disputes from insurance companies either for health insurance, long-term care insurance, or life insurance
- Help your loved ones seek legal guardianship or conservatorship, if prior planning proves insufficient and you have lost capacity
- Employment and retirement matters
- General advice and counsel on issues surrounding aging
Many elder law attorneys do not charge for a consultation fee. However, it is important to know up front if there is a fee, and also what the attorney’s (and paralegal’s) fees are before getting started. It is your right and responsibility to know.
Legal Steps For Medical Well-Being
“Advance directive” is a general term used to describe these two types of documents:
- Living wills (sometimes called “advance health care directives”) are written instructions for care you want or do not want in the event that you are not able to make medical decisions for yourself. State laws vary, so it is important to check on your state’s requirements when completing these documents
- Appointment of a health care surrogate or Medical power of attorney (also called a durable power of attorney for health care) is a document that names someone to make health care decisions for you when you cannot.
- The powers granted in a durable power of attorney are those described in the document, or included by state statute. Those powers only include health care decisions, if the document or statutes include the authority to make health care decisions. The law varies by state law- you should consult an experienced attorney for advice on your states’ requirements.
GOOD TO KNOW
If you are incapacitated, a guardianship would give another person (often a loved one) legal authority to care for your personal and property interests.
Advance directives should list the treatments you do and do not want to receive. For example, you may choose to have your doctor include a Do Not Resuscitate (DNR) order in your medical record. This tells all health care providers that you do not want them to attempt life-saving measures such as cardiopulmonary resuscitation (CPR) in the event you have heart attack or respiratory arrest.
Organizing Your Documents
Keep your planning documents easily accessible and in more than one place. It is important that your health care decision maker has a copy, or can access a copy quickly in an emergency. Give copies to appropriate family members and friends, your physician, and your lawyer. Consider carrying a wallet card.
Legal Steps For Financial Well-Being
The following legal documents can help you protect the assets you’ve earned through your lifetime, and keep you in control of how they are used for your care:
- A Durable Power of Attorney gives the person you choose the power to manage your financial estate and make your health care decisions if health care authority is included in the document or included by state statute. A Durable Power of Attorney is effective when signed, unless the document says otherwise. A Power of Attorney must satisfy state requirements for “durability” to be used when you are no longer able act on your own. Each state has its own laws enumerating the specific powers a grantee can hold and can be found online, typically on a state government website, or through a legal professional
- In a Living Trust, your assets are put into a trust that is administered for your benefit during your lifetime, and then transferred to your beneficiaries when you die. This type of trust can avoid or minimize the need for probate. You can maintain control of the trust through your lifetime. The trust should name a successor trustee to control the assets if you become incapacitated and after your death. Trusts are strongly recommended for large or complex estates or in states that have an especially complex probate process.
- Families with large estates should consult an expert for advice about income, estate and inheritance tax planning.
Ensure that your family and other important people in your life understand what your wishes are, and what is included in these documents. Discuss your wishes with the person who will make your health care decisions, and be sure that they are comfortable with their role, and that they can be available to carry out your wishes.
Costs & How To Pay
Just as there are many kinds of long-term care services and supports, so is there a wide range of costs for them. And while some people may qualify for a public program to help pay for these expenses, most people use a variety of options, including long-term care insurance, personal income and savings, life insurance, annuities and reverse mortgages to ensure they can pay for the care they require. As our population ages, new financial products are offering yet more options.
Important questions answered in this section:
- What are the costs of care?
- Does disability or health insurance cover long-term care?
- What is long-term care insurance?
- How can I use life insurance to pay for long-term care?
- What are other ways to pay privately?
Costs Of Care
Some average costs for long-term care in the United States (in 2010) were:
- $205 per day or $6,235 per month for a semi-private room in a nursing home
- $229 per day or $6,965 per month for a private room in a nursing home
- $3,293 per month for care in an assisted living facility (for a one-bedroom unit)
- $21 per hour for a home health aide
- $19 per hour for homemaker services
- $67 per day for services in an adult day health care center
The cost of long-term care depends on the type and duration of care you need, the provider you use, and where you live. Costs can be affected by certain factors, such as:
- Time of day. Home health and home care services, provided in two-to-four-hour blocks of time referred to as “visits,” are generally more expensive in the evening, on weekends, and on holidays
- Extra charges for services provided beyond the basic room, food and housekeeping charges at facilities, although some may have “all inclusive” fees.
- Variable rates in some community programs, such as adult day service, are provided at a per-day rate, but can be more based on extra events and activities
What Is Covered By Health & Disability Insurance
Many people believe that the medical insurance they currently have will pay for all or much of their long-term care. In general, health insurance covers only very limited and specific types of long-term care, and disability policies don’t cover any at all.
Most forms of insurance, such as the private health insurance or HMO you may have on your own or through your employer, follow the same general rules as Medicare with regard to paying for long-term care services. If they do cover long-term care services, it is typically only for skilled, short-term, medically necessary care.
- Like Medicare, the skilled nursing stay must follow a recent hospitalization for the same or related condition and is limited to 100 days
- Coverage of home care is also limited to medically necessary skilled care
- Most forms of private insurance do not cover custodial or personal care services at all
- Your plan may help you pay for some of the copayments or deductibles that Medicare imposes. For example, your plan may help cover the $137.50 per day for Medicare covered nursing home care for days 21 through 100
- Cover Medicare copayments and deductibles
- Enhance your hospital and doctor coverage, but does not extend to long-term care coverage
- Cover the daily Medicare copayment of $148.00 per day for days 21 through 100 for the small portion of nursing home stays that qualify for Medicare coverage
- Medigap insurance is not intended to meet long-term care needs and provides no coverage for the vast majority of long-term care expenses like care in a nursing home, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.
There are 12 standardized Medigap plans defined by federal law. Find out more about Medigap and see what is covered at the official government website for Medicare.
Disability insurance is intended to replace some of a working person’s income when a disability prevents them from working. It does not:
- Cover medical care or long-term care services
- Provide benefits once you are over age 65—when you are most likely to need long-term care services
Coverage Limit Chart
The below chart shows the most common types of insurance and the very limited long-term care coverage they provide.
Coverage Limits of Long-term care Offered by Health Insurance
Long-term care Service
Private Health Insurance
Limited coverage for nursing homecare following a hospital stay and home health if you require a nurse or other skilled provider
Insurance purchased to cover Medicare cost sharing
Varies, but generally only covers services for a short time following a hospital stay, surgery or while recovering from an injury
Nursing home care
Pays in full for days 1–20 if you are in a Skilled Nursing Facility following a recent 3-day hospital stay If your need for skilled care continues, may pay for the difference between the total daily cost and your copayment of $137.50 per day for days 21-100. After day 100 does not pay
Varies, but limited
Assisted living facility(and similar facility options)
Does not pay
Does not pay
Does not pay
Continuing Care retirement community
Does not pay
Does not pay
Does not pay
Home health and personal care
Limited to reasonable, necessary part-time or intermittent skilled nursing care and home health aide services, some therapies if a doctor orders them, and a Medicare-certified home health agency provides them. Does not pay for on-going personal care or only help with Activities of Daily Living (also called “custodial care”)
Not covered under current policies. Some policies sold prior to 2009 offered an at-home recovery benefit that pays up to $1,600 per year for short-term at-home assistance with activities of daily living (bathing, dressing, personal hygiene, etc.) for those recovering from an illness, injury, or surgery
Varies, but limited
What Is Long-Term Care Insurance?
Unlike traditional health insurance, long-term care insurance is designed to cover long-term services and supports, including personal and custodial care in a variety of settings such as your home, a community organization, or other facility.
Long-term care insurance policies reimburse policyholders a daily amount (up to a pre-selected limit) for services to assist them with activities of daily living such as bathing, dressing, or eating. You can select a range of care options and benefits that allow you to get the services you need, where you need them.
The cost of your long-term care policy is based on:
- How old you are when you buy the policy
- The maximum amount that a policy will pay per day
- The maximum number of days (years) that a policy will pay
- The maximum amount per day times the number of days determines the lifetime maximum amount that the policy will pay.
- Any optional benefits you choose, such as benefits that increase with inflation
If you are in poor health or already receiving long-term care services, you may not qualify for long-term care insurance as most individual policies require medical underwriting. In some cases, you may be able to buy a limited amount of coverage, or coverage at a higher “non-standard” rate. Some group policies do not require underwriting.
GOOD TO KNOW
Many long-term care insurance policies have limits on how long or how much they will pay. Some policies will pay the costs of your long-term care for two to five years, while other insurance companies offer policies that will pay your long-term care costs for as long as you live—no matter how much it costs. But there are very few that have no such limits.
Before you buy a policy, be aware that the insurance company may raise the premium on your policy. It is a good idea to request information on the company’s premium rate history.
What Long-Term Care Insurance Covers
Most policies sold today are comprehensive. They typically allow you to use your daily benefit in a variety of settings, including:
- Your home
- Adult day service centers
- Hospice care
- Respite care
- Assisted living facilities (also called residential care facilities or alternate care facilities)
- Alzheimer’s special care facilities
- Nursing homes
In the home setting, comprehensive polices generally cover these services:
- Skilled nursing care
- Occupational, speech, physical, and rehabilitation therapy
- Help with personal care, such as bathing and dressing
GOOD TO KNOW
Receiving Long-Term Care Insurance Benefits
Benefit triggers are the criteria that an insurance company will use to determine if you are eligible for benefits. Most companies use a specific assessment form that will be filled out by a nurse/social worker team. Benefit triggers:
- Are the criteria insurance policies use to determine if you are eligible for long-term care benefits
- Are determined through a company sponsored nurse/social worker assessment of your condition.
- Usually are defined in terms of Activities of Daily Living (ADLs) or cognitive impairments
- Most policies pay benefits when you need help with two or more of six ADLs or when you have a cognitive impairment
- Once you have been assessed, your care manager from the insurance company will approve a Plan of Care that outlines the benefits for which you are eligible.
- Is like the deductible you have on car insurance, except it is measured in time rather than by dollar amount
- Most policies allow you to choose an elimination period of 30, 60, or 90 days at the time you purchased your policy
- During the period, you must cover the cost of any services you receive
- Some policies specify that in order to satisfy an elimination period, you must receive paid care or pay for services during that time
Once your benefits begin:
- Most policies pay your costs up to a pre-set daily limit until the lifetime maximum is reached
- Other policies pay a pre-set cash amount for each day that you meet the benefit trigger, whether you receive paid long-term care services on those days or not
- These “cash disability” policies offer more flexibility but are potentially more expensive
Buying Long-Term Care Insurance
People with certain conditions may not qualify for long-term care insurance. Since standards vary between different insurance companies, if one company denies you, it is possible that another company will accept you. Common reasons why you might not be able to buy long-term care insurance include:
- You currently use long-term care services
- You already need help with Activities of Daily Living (ADL)
- You have AIDS or AIDS-Related Complex (ARC)
- You have Alzheimer’s Disease or any form of dementia or cognitive dysfunction
- You have a progressive neurological condition such as multiple sclerosis or Parkinson’s Disease
- You had a stroke within the past year to two years or a history of strokes
- You have metastatic cancer (cancer that has spread beyond its original site)
Insurance companies also consider other health conditions when determining your eligibility. If you buy your long-term care insurance before you develop one of the health conditions listed above, then your policy will cover the care you need for that condition.
Before You Buy
You should consider a number of things before purchasing LTC insurance:
- Don’t buy more insurance than you think you may need. You may have enough income to pay a portion of your care costs and you may only need a small policy for the remainder. You also may have family members willing and able to supplement your care needs
- Don’t buy too little insurance. That will only delay the use of your own assets or income to pay for care. Think about how you feel about having care costs that are not covered. While you can usually decrease your coverage, it is more difficult to increase coverage, especially if your health has declined
- Look carefully at each policy. There is no “one-size-fits-all” policy
- If you choose a policy that only pays for room and board in a facility, plan for other expenses, such as supplies, medications, linens, and other items and services that your policy may not cover
- It costs less to buy coverage when you are younger. The average age of people buying long-term care insurance today is about 60. The average age of those purchasing policies offered at work is about 50
- Make sure that you can afford the long-term care insurance policy over time, as your monthly income may change
- Research and consider different options and talk with a professional before finalizing your decision
- Don’t feel pressured into making a decision
Where To Look For Long-Term Care Insurance
Most people buy long-term care insurance directly from an insurance agent, a financial planner, or a broker. Some important points:
- States regulate which companies can sell long-term care insurance
- States regulate the products that companies can sell
- There are more than 100 companies offering long-term care insurance nationally, but 15 to 20 insurers sell most policies
- The best way to find out which insurance companies offer long-term care coverage in your state is to contact your state’s Department of Insurance
State Partnership Programs
Residents of some states may be able to find long-term care coverage through a State Partnership Program that links special Partnership-qualified (PQ) long-term policies provided by private insurance companies with Medicaid. These PQ policies:
- Help people purchase shorter term, more complete long-term care insurance
- Include inflation protection, so the dollar amount of benefits you receive can be higher than the amount of insurance coverage you purchased
- All you to apply for Medicaid under modified eligibility rules if you continue to need long-term care and your policy maximum is reached
- Include a special “asset disregard” feature that allows you to keep assets like personal savings above the usual $2,000 Medicaid limit.
The following example shows how a Partnership-qualified policy works:
- John, a single man, purchases a Partnership policy with a value of $100,000.
- Some years later he receives benefits under that policy up to the policy’s lifetime maximum coverage (adjusted for inflation) equaling $150,000.
- John eventually requires more long-term care services, and applies for Medicaid. If John’s policy was not a Partnership-qualified policy, in order to qualify for Medicaid, he would be entitled to keep only $2,000 in assets. He would have to spend down any assets over and above this amount.
- But because John bought a Partnership-qualified policy, he can keep $152,000 in assets and the state will not recover those funds after his death. John would only have to spend down his assets over and above the $152,000 in order to be eligible for Medicaid.
Since Partnership-qualified policies must include inflation protection, the amount of the benefits you receive can be higher than the amount of insurance protection you purchased. For example, if you have a Partnership-qualified long-term care insurance policy and receive $100,000 in benefits from it, you can apply for Medicaid and, if eligible, retain $100,000 worth of assets over and above the state’s Medicaid asset threshold. In most states the asset limit is $2,000 for a single person. Asset limits for married couples are often higher.
States must certify that partnership policies meet the specific requirements for their partnership program, including that those who sell partnership policies are trained and understand how these policies relate to public and private coverage options. To find out more about your state’s program, including which insurance agents are selling partnership policies, or to find out if your state offers a partnership program, contact your state’s Department of Insurance.
Many private and public employers, including the federal government and a growing number of state governments, offer group long-term care programs as a voluntary benefit, and generally:
- Employers do not typically contribute to the premium cost (as they do with health insurance), but they often negotiate a favorable group rate
- If you are currently employed, it may be easier to qualify for long-term care insurance through your employer than it is to purchase a policy on your own
- You should check with your benefit or pensions office to see if your employer offers long-term care insurance.
The U.S. Office of Personnel Management has additional information about the Federal Long Term Care Insurance Program for employees of the federal government.
Long-Term Care Insurance Costs
If you have a long-term care insurance policy, the buyer pays a pre-set premium. The policy then pays for the services you need, when you need them (up to its coverage limits). On occasion, if the assumptions used to price the policy prove wrong, the insurance company can increase your premiums beyond the pre-set amount. Typically, you are not expected to pay premiums while you receive long-term care.
The cost of a long-term care policy varies greatly based on:
- Your age at the time of purchase
- The policy type
- The coverage you select
In 2007, the average long-term care insurance policy:
- Cost about $2,207/year
- Covered 4.8 years of benefits, excluding the 20 percent of people who elected lifetime coverage
- Had a daily benefit amount of $160
- Was a comprehensive policy covering both facility and at-home care
- Included some form of automatic inflation protection
Using Life Insurance To Pay For Long-Term Care
You can use your life insurance policy to help pay for long-term care services through the following options:
- Combination (Life/long-term care) Products
- Accelerated Death Benefits (ADBs)
- Life settlements
- Viatical settlements
Many consumers are reluctant to buy long-term care insurance because they fear that their investment will be wasted if they do not use it. Some insurance companies have attempted to solve this problem by combining life insurance with long-term care insurance. The idea is that policy benefits will always be paid, in one form or another. These products are relatively new and the features are changing as the product evolves. The amount of the long-term care benefit if often expressed in terms of a percentage of the life insurance benefit.
Accelerated Death Benefits (ADBs)
A feature included in some life insurance policies that allow you to receive a tax-free advance on your life insurance death benefit while you are still alive. Sometimes you must pay an extra premium to add this feature to your life insurance policy. Sometimes the insurance company includes it in the policy for little or no cost.
There are different types of ADBs each of which serves a different purpose. Depending on the type of policy you have, you may be able to receive a cash advance on your life insurance policy’s death benefit if:
- You are terminally ill
- You have a life-threatening diagnosis, such as AIDS
- You need long-term care services for an extended amount of time
- You are permanently confined to a nursing home and incapable of performing Activities of Daily Living (ADL), such as bathing or dressing
GOOD TO KNOW
The amount of money you receive from these types of policies varies, but typically the accelerated benefit payment amount is capped at 50 percent of the death benefit. Some policies, however, allow you to use the full amount of the death benefit.
For ADB policies that cover long-term care services, the monthly benefit you can use for nursing home care is typically equal to two percent of the life insurance policy’s face value. The amount available for home care (if it is included in the policy) is typically half that amount.
For example, if your life insurance policy’s face value is $200,000, then the monthly payout available to you for care in a nursing home would be $4,000, but only $2,000 for home care. Some policies may pay the same monthly amount for care, regardless of where you receive the care.
When you receive payments from an ADB policy while you are alive, the amount you receive is subtracted from the amount that will be paid to your beneficiaries when you die.
Key things to consider before taking advantage of an ADB policy include:
- If your life insurance policy includes an ADB feature, you may be able to use your life insurance policy to help cover long-term care services. Depending on the policy amount, there may be little or no health screenings required. So if you have a health condition that might exclude you from long-term care insurance eligibility, you can still obtain along-term care insurance policy through the ADB feature on a life insurance policy.
- ADB policy payouts for long-term care services are often more limited than the benefits you could receive from a typical long-term care insurance policy.
- The face value of your life insurance policy may not be enough to allow ADB payments that are enough to cover your long-term care services needs. The benefit payments may be too low and the duration may be too short to cover your long-term care services expenses.
- ADB riders on life insurance policies may not offer inflation protection. If the policy does not include inflation protection, the ADB payment may not be sufficient to cover your future long-term care service costs.
- If you want to leave an inheritance, you should consider whether using your life insurance death benefit to pay for long-term care services is the right option. If you use the ADB feature for long-term care services, there may be little or no death benefit remaining for your survivors.
- Using the ADB option may affect your eligibility for Medicaid. Check with your state Medicaid agency for more information.
These plans allow you to sell your life insurance policy for its present value to raise cash for any reason. This option is usually only available to women age 74 and older and to men age 70 and older. You may choose to use the proceeds to pay for long-term care services.
Key things to consider before moving forward with a life settlement:
- If you sell your life insurance policy, there may be little or no death benefit left for your heirs when you die
- The process does not require any health screens; you may be in good or poor health
- The proceeds of the sale may be taxed
These plans allow you to sell your life insurance policy to a third party and use the money you receive to pay for long-term care. A viatical settlement is like a life settlement, but it is only possible if you are terminally ill. During the settlement process, a viatical company pays you a percentage of the death benefit on your life insurance policy, which is based on your life expectancy. The viatical company then owns the policy and is its beneficiary. The viatical company also takes over payment of premiums on the policy. As a result, you get money to pay for care, and the viatical company receives the full death benefit after you die.
Unlike the life settlement, money you receive from a viatical settlement is tax-free, if you have a life expectancy of two years or less or are chronically ill and the viatical company is licensed in the states in which it does business.
Key things to consider before using a viatical settlement:
- You can only use the viatical settlement if you are terminally ill and have a life expectancy of two years or less
- If you use the viatical settlement option, you do not have to satisfy the health requirements for long-term care insurance
- If you use the viatical settlement option, your life insurance policy will not pay a death benefit to your heirs
- Viatical companies approve less than 50 percent of applicants
The amount that you receive in cash from a viatical settlement is a percent of the death benefit on your life insurance policy. The chart below lists guidelines from the National Association of Insurance Commissioners (NAIC), for how that percent varies based on your life expectancy.
NAIC Guidelines for Viatical Payments
Over 24 months
If you have enough income and savings, you will need to pay for long-term care services on your own, from your incomes, savings, and possibly the equity in your home. In this section we will explore a few of the growing number of ways you can pay for your long-term care privately. These methods include:
A reverse mortgage is a special type of home equity loan that allows you to receive cash against the value of your home without selling it.
For most reverse mortgages:
- You can choose to receive a lump-sum payment, a monthly payment, or a line of credit
- There are no restrictions on how you use the remainder of the money
- You continue to live in the home and you retain title and ownership of it
- You are also still responsible for taxes, hazard insurance, and home repairs
- However, you do not have to repay the loan as long as you continue to live in the home.
- Instead, the amount you owe, based on loan payouts and interest on the loan, becomes due when you or the last borrower, usually the last remaining spouse, dies, sells, or permanently moves out of the home
To qualify for a reverse mortgage:
- You must be age 62 and older
- Unlike a traditional mortgage, you do not have to provide an income or credit history to get the loan
- The home must be your primary residence
How to apply:
- You must meet with an approved reverse mortgage counselor before you can start the loan process. These counselors can help you decide whether a reverse mortgage is right for you.
- You must use the funds you receive to pay off any existing mortgages or other debt against your home and to make required home repairs
- As long as you spend the payments you receive in the month that you receive them, the money is not taxable and does not count towards income or affect Social Security or Medicare benefits
- Does not count as income for Medicaid eligibility
- Once you have a reverse mortgage, it is very difficult to borrow any more against your home. But you can refinance a reverse mortgage if the house increases significantly in value.
- If your heirs want to keep your home, they can repay the reverse mortgage. They can also keep the difference if the home’s sale price is greater than the reverse mortgage loan balance when they repay the loan.
Reverse Mortgages Types
mortgage lender. Some credit unions and banks, with state and local housing agencies, may offer these loans as well.
three types of reverse mortgages:
- Home Equity Conversion Mortgage (HECM)
The Department of Housing and Urban Development (HUD) offers HECMs and the Federal Housing Administration (FHA) insures them. HECMs are the most popular reverse mortgages, representing about 90 percent of the market. The federal government regulates most upfront costs for HECM loans. There are limits on the total fees and interest rates that you must pay
- Fannie Mae Home Keeper Loan
The loan limits for Fannie Mae Home Keeper Loan is higher than for HECMs. Therefore, you may receive more cash from these loans than with a HECM
- Financial Freedom Cash Account Loans
Financial Freedom Cash Account Loans are designed for seniors who own expensive homes
GOOD TO KNOW
For more information on Reverse Mortgages, please see the Consumer Financial Protection Bureau’s Reverse Mortgage Guide
Conventional vs. Reverse Mortgage
The concept of a reverse mortgage may be simple, but there are many details to consider before purchasing one. Below is a comparison chart to help you understand and help you decide if a reverse mortgage is right for you.
Purchase a home
Get cash from home equity
At the time of closing:
You owe a lot and have little equity in the home
You owe little and have a lot of equity in the home
During the loan:
At the end of the loan:
You may choose to enter into an annuity contract with an insurance company to help pay for long-term care services. In exchange for a single payment or a series of payments, the insurance company will send you an annuity, which is a series of regular payments over a specified and defined period of time. There are two types of annuities:
If you have an immediate long-term care annuity, the insurance company will send you a specified monthly income in return for a single premium payment.
This option is available regardless of your current health status. If you do not qualify for long-term care insurance because of age or poor health or if you are already receiving long-term care, you can still purchase an annuity.
The insurance company converts your single premium payment into a guaranteed monthly income stream for a specified period of time or for the rest of your life. How much you receive in income each month depends on the amount of your initial premium, your age, and gender. Since women tend to live longer than men, women generally receive a smaller monthly payment over a longer period of time than do men of the same age.
Key things to consider before purchasing an annuity:
- The annuity amount you receive may not be enough to pay for your long-term care expenses.
- Inflation may reduce the value of the monthly income you receive from the annuity.
- The effect that annuities can have on your taxes is complicated. Consult your tax professional before purchasing one.
Deferred Long-term Care Annuity
These plans are available to people up to age 85. Similar to other annuities, in exchange for a single premium payment, you receive a stream of monthly income for a specified period of time.
You can access the long-term care fund immediately, but you must wait until a specified day in the future to access the separate cash portion. The rules of the annuity define how much you can access on a monthly basis from the long-term care fund and how much you can access on an annual basis from the cash fund. To qualify for a deferred long-term care annuity, you must satisfy some health criteria.
Key things to consider before purchasing a deferred long-term care annuity:
- If you do not use the long-term care fund, you can pass it on to your heirs
- The annuity may not be enough to pay for your long-term care expenses
- The long-term care portion of the annuity may satisfy the requirements for a tax-qualified long-term care policy.
- The effect that annuities can have on your taxes is complicated. Consult your tax professional before purchasing one
- An annuity can affect your eligibility for Medicaid, and whether Medicaid will pay for your long-term care services. See the section on “Annuities” in the “Medicaid Eligibility” section for more information.
A trust is a legal entity that allows a person (the trustor) to transfer assets to another person (the trustee). Once the trustor establishes the trust, the trustee manages and controls the assets for the trustor or for another beneficiary.
You may choose to use a trust to provide flexible control of assets for the benefit of minor children. Another common use of a trust is to provide flexible control of assets for an older adult or a person with a disability, which could include yourself or your spouse. Two types of trusts can help pay for long-term care services:
- Charitable Remainder Trusts
- Medicaid Disability Trusts
Charitable Remainder Trusts
This trust allows you to use your own assets to pay for long-term care services while contributing to a charity of your choice and reducing your tax burden at the same time. You can set up the trust so that you receive payments from the trust to use for long-term care services while you are alive.
When you die, the balance of the funds in the trust goes to the charity that you selected. Since you are making a charitable donation, you can receive tax deductions for the fair market value of the assets that go to your chosen charity.
Key things to consider before setting up a charitable remainder trust:
- The amount of money available to you to use for long-term care services is based on the amount of your donation. These payments are only likely to be large enough to help pay for long-term care expenses if you donate a substantial amount of money to the charity
- The donation may affect your Medicaid eligibility
Medicaid Disability Trusts
These trusts are limited to persons with disabilities who are younger than age 65 and qualify for public benefits. Parents, grandparents, or legal guardians often set up these trusts to benefit persons with disabilities and a non-profit organization manages the assets. This is the only kind of trust that is exempt from rules regarding trusts and Medicaid eligibility.
Key things to consider before setting up a Medicaid Disability Trust:
- If a beneficiary with a disability receives Medicaid benefits, the state can recover any amount remaining in the Medicaid Disability Trust when he or she dies
- The tax implications for Medical Disability Trusts are complicated. Consult a tax professional before establishing a Medicaid Disability Trust