How To Find And Pay For Long-Term Care

What Is Long-Term Care?

The DHHS defines long-term care as “a range of services and supports you may need to meet your personal care needs.”

In addition to being needed for an extended period of time, this type of care is intended to help individuals with Activities of Daily Living (ADLs) such as bathing, dressing, using the bathroom, and eating.

It also involves assisting with other tasks they may find difficult to complete, such as doing housework, managing their finances, and grocery shopping. These activities are commonly referred to as Instrumental Activities of Daily Living (IADLS).

The National Institute on Aging says there are several factors that can potentially contribute to a person’s risk of needing long-term care later in life beyond advancing in age. These risk factors include:

• Being female, because women usually live longer
• Being single, because these individuals typically need care more often than those who are married
• Having unhealthy lifestyle habits, such as having a poor diet and not exercising regularly
• A family history of health issues that could require long-term care

Finding Inpatient Long-Term Care

While a majority of long-term care is provided in the home, there are many facility-based programs that offer these types of services on an inpatient basis as well.

Among them are long-term hospital care, nursing homes, assisted livings, board and care homes, and continuing care retirement communities.

Long-Term Hospital Care

Long-term hospital care may be required if you have more than one serious medical condition, but there is a good possibility that you will be able to return home with enough time and care, according to the DHHS.

A long-term hospital differs from an acute care hospital in that the former typically provides patients with a stay of more than 25 days, whereas the latter’s length of stay is typically much shorter.

Long-term hospital care facilities are often utilized by patients who are on ventilators, receiving dialysis, require intensive respiratory care, have multiple IV medications, or need complex care for wounds or burns.

To find the options available in your area, Medicare.gov offers an online long-term care hospital search based on your zip code, city and state, or just your state. It also tells you how far each one is from your home, how many long-term care beds it has, and its contact information.

If you want to compare a few different long-term hospitals, simply click the “Add to Compare” button next to each one before clicking the “Compare Hospitals” button at the top of the page. This gives you more in-depth information on each, such as:

• Your risk of developing a health-related complication at that facility
• The rate of improvement in functional abilities seen in its patients
• How the hospital compares to the National Benchmark for healthcare-associated infections
• Readmission rates
• The number of successful returns home

This can help you make the best decision for you based on the options available in your area.

Nursing Homes For Long-Term Care

Nursing homes are designed for people who don’t require hospital care, but do require full-time care outside the home. Some of them look like hospitals, while others are more reminiscent of a community or neighborhood.

Nursing homes are often used when an individual experiences cognitive issues that can prevent someone from living alone, such as Alzheimer’s disease or other type of dementia, but that do not require constant medical attention and care.

If you’re not sure what to look for when searching for the right nursing home for you or a loved one, Medicare.gov offers a handy Nursing Home Checklist you can print off and take with you as you visit the homes in your area.

This list reminds you to check things such as whether the home is Medicare-certified, the condition of the living spaces, training level of the staff, and what the resident rooms look like. It also prompts you to ask about the home’s menu and activities to help you make a more informed decision based on both the basics and amenities that particular home offers.

The DHHS also has a booklet titled Your Guide to Choosing a Nursing Home or Other Long-Term Services & Supports that’s helpful to bring along. It breaks down how you can find and compare nursing homes, your rights as a resident, and alternatives to this type of care.

Long-Term Care And Assisted Living

Assisted living is another type of long-term care that offers people a place to live, assistance with personal care, and health care services, but they do it in a way that fosters the resident’s independence.

Like nursing homes, assisted living facilities often cater to older individuals diagnosed with a form of dementia. However, some nursing homes also provide services for all ages of individuals who either have a developmental disability or specific medical condition.

Individuals in assisted living can often expect to receive 24-hour supervision, three meals a day in a group dining setting, and personal care services. Assisted living staff also typically assist with medication management, recreational activities, wellness programs, and transportation arrangements.

To find resources relevant to assisted living facilities in your area, the National Center for Assisted Living offers an online search based on your state. This also provides links to websites for your state’s assistance program, resources for choosing the right care, and more.

Board And Care Homes

If you’re unfamiliar with board and care homes, they offer the same type of services as assisted living facilities. However, these services occur in a smaller setting and/or in a facility that is owned and operated by a person or small business as opposed to a large healthcare entity.

Some states offer programs that help to offset the costs associated with board and care. For instance, the California Advocates for Nursing Home Reform reports that individuals living in a board and care facility within the state who have “countable income” in the amount of $1,500 per month may be eligible for Medi-Cal, a program offering free or low-cost health coverage to individuals with limited resources.

Continuing Care Retirement Communities

Another long-term care option is a continuing care retirement community, which offers residents different resources based on their individual needs.

These communities can be set up as single-family homes, apartments, or condominiums. If additional care is required at some point, the individual is then transitioned into an assisted living or nursing home facility within that community.

The one major benefit of continuing care retirement communities is that residents are able to live in the same community for the rest of their lives. However, the big disadvantage is that they are the most expensive long-term care option. The American Association of Retired Persons (AARP) reports that entrance fees typically range from $100,000 to $1 million, and that’s in addition to monthly fees that are generally somewhere between $3,000 and $5,000.

If you want to take this long-term care route as a couple, you should ask the facility what happens if you begin to require different levels of care, of if one of you dies while the other is still in care. This will give you a better understanding of what you can expect if either of these situations arise.

Paying For Long-Term Care

Long-term care can be extremely expensive. The DHHS reports that costs of care in nursing homes can run between $225 and $253 per day depending on whether you have a semi-private or private room, while assisted living facilities can cost around $119 per day.

All of these expenses can add up quickly, so what can you do to help pay for them all?

Medicare And Long-Term Care Coverage

If you have Medicare, it will not cover long-term care if you don’t need other types of care as well, according to Medicare.gov. So, what benefits does it provide?

Long-term hospital care

Medicare provides long-term hospital care benefits, but you are also responsible for your deductible for that specific benefit period. Also, if you’re transferred to a long-term care hospital from an acute care hospital or if you’re admitted within 60 days of an inpatient hospital stay, you’re covered by the deductible paid for that original hospital stay. If you’ve been out any longer, a new benefit period—and a new deductible—begins.

Skilled nursing facility care

Medicare Part A (Hospital Insurance) provides some benefits for skilled nursing care provided in skilled nursing facilities. These benefits can include expenses related to having a semi-private room and covering costs associated with physical and occupational therapy, meals, medications, and medical equipment and supplies. To qualify, you must have days left in your benefit period, have a qualifying hospital stay, and the skilled nursing facility care has to be recommended by your doctor. Your cost for this in 2019 is $0 per benefit period for days 1 to 20, $170.50 coinsurance for days 21 to 100, and if you’re in for 101 days or more, you must cover all of the costs.

Hospice and respite care.

Medicare also offers many benefits related to hospice care, some of which include doctor services, physical and occupational services, pain or symptom control medications, and grief and loss counseling. However, once benefits begin, Medicare will not cover any treatments that are designed to cure your condition, room and board in an inpatient facility, or care not set up by your hospice medical team. The cost is $0 for hospice care, but a $5 copayment for prescription drugs may apply. You may also be deemed responsible for 5 percent of the Medicare-approved amount if inpatient respite care is required.

Medicare will also cover certain home health services under parts A and B. Among them are physical and occupational therapy, medical social services, and part-time or intermittent skilled nursing or home health aide care.

If you need durable medical equipment such as walkers, wheelchairs, and hospital beds, Medicare will pay a portion of the expenses, but you will likely be responsible for 20 percent of the Medicare-approved amount.

What Medicare does not cover is at-home expenses such as 24-hour care or meal deliveries. It also doesn’t pay for homemaker services like paying someone to do your grocery shopping, cleaning, and laundry.

Long-Term Care Insurance

In 2017, there was $9.23 billion paid in claims against long-term care insurance, according to the American Association for Long-Term Care Insurance. This was up from $8.14 billion just two years before. However, not everyone is eligible for long-term care insurance.

For instance, if you currently use long-term care services or already need someone to assist you with ADLs, then you may be denied a long-term care policy. Certain health conditions can also make it difficult, if not impossible, to buy long-term care insurance. These conditions include:

• AIDS (Acquired Immunodeficiency Syndrome) or ARC (AIDS-Related Complex)
• Alzheimer’s disease, dementia, or some other type of cognitive dysfunction
• Multiple sclerosis, Parkinson’s, or another progressive neurological condition
• Metastatic cancer

Long-term care insurance companies may also deny you if you’ve had a stroke within the last two years or if you have a history of strokes.

Long-term care insurance can be purchased from an insurance agent, financial planner, or broker, and there are approximately 100 different companies currently offering this type of policy.

There are also Long-Term Care Partnership Programs designed to help qualified individuals protect part of their assets if they qualify for coverage via Medicaid.

Before purchasing any type of long-term care policy, it’s recommended that you don’t buy too little insurance, but also that you don’t buy too much.

Additionally, because long-term care insurance is cheaper when you are younger, you may want to consider purchasing it when you’re around 60, which is the average age of people looking for this type of policy.

Life Insurance For Long-Term Care Coverage

Another way to pay for long-term care involves using your life insurance policy. You can do this in four different ways:

Combination products. By combining life insurance with long-term care, these policies appeal to those who may be worried that purchasing long-term care is a waste of money if they don’t end up needing it. At some point, it will pay out.

Accelerated death benefits. This enables you to take a tax-free cash advance on your policy’s death benefit if you are terminally ill, have a life-threatening diagnosis, need long-term care for an extended period, or are permanently confined to a nursing home and need help with your ADLs.

Life settlements. With this plan, you can sell your life insurance policy for its present cash value and use that money to help pay for your long-term care. However, this option generally only exists for men who are 70 years old or older or women who are 74 and up. It also may be taxed and it limits (if not completely eliminates) your total death benefit.

Viatical settlements. This involves selling your life insurance policy to a third-party buyer for purposes of paying for your own long-term care. You receive this money tax-free, but you must be terminally ill to qualify for this option. The third-party company becomes your new beneficiary and benefit percentages received are based on your life expectancy, starting at 80 percent if you have one to six months to live and decreasing to 50 percent if you are expected to live for two years or more.

Private Long-Term Care Payment Options

You also have a variety of private options for paying for any necessary long-term care, and they include annuities, trusts, and reverse mortgages.

Annuities. With an annuity, you make either one payment or a series of payments to an insurance company in return for that company agreeing to send you a certain number of payments for a specific period of time. Under an immediate annuity, the amount you receive is dependent upon how much you paid in, your age, and your gender (women receive smaller amounts because they tend to live longer). You can also purchase a deferred long-term care annuity, giving you immediate access to funds for whatever you need, but also creating a fund to cover your long-term care expenses.

Trusts. Another private payment option involves establishing one of two types of trust. The first is a Charitable Remainder Trust that enables you to pay for your own long-term care while also contributing to a charity to reduce the amount of taxes you’ll be required to pay (upon death, the remainder of the trust is donated to charity). The second is a Medicaid Disability Trust, which is a trust available to individuals under the age of 65 who have a disability and qualify for public benefits.

Reverse mortgages. You can also potentially use a reverse mortgage to help cover your long-term care needs. You must be at least 62 years old to qualify, and the home you’re getting the reverse mortgage on must be your primary residence. Also, all taxes, hazard insurance, and home repairs are still your responsibility while you’re living there.

Additional Long-Term Care Resources

To learn more about your options with regard to finding and paying for long-term care, Medicare.gov provides a list of agencies that can potentially help you make the right long-term care choice for you or your loved one.

Among them are:

• Area Agencies on Aging
• Aging and Disability Resource Centers
• Centers for Independent Living
• State Technology Assistance Project