COLUMN OF JOEL MEKLER: Need long-term care? Don’t Expect Medicare to Cover | Lifestyles
Don’t fall for one of the biggest myths of all time: that Medicare covers long term care. If you thought Medicare would pay for long term care, like living in a retirement home, you are not alone. Medicare does not and has never covered long term care.
Consider these statistics.
•Someone who is 65 today is almost 70 percent likely to need some type of long-term care and support service in their remaining years.
•20% of those who reach the age of 65 will need care for more than five years.
•About 35% of people who reach the age of 65 are expected to enter a retirement home at least once in their lifetime.
•Over 56% of middle-income baby boomers believe Medicare will pay for their long-term care.
•Almost 80 percent have no money set aside specifically for their long-term care needs.
According to a 2020 Genworth Cost of Care Survey, the national median annual cost of an assisted living facility is approximately $ 51,000; a whopping $ 105,000 for a private room in a nursing home; and approximately $ 55,000 for home help services.
Long-term care, often referred to as on-call care, is a range of services and supports to meet personal or health needs over an extended period of time. Typically, this is non-medical care provided by unauthorized caregivers.
As it is, Medicare will only cover long-term care if a beneficiary requires qualified services or rehabilitative care under Part A. This includes
•Acute hospital care
•Qualified nursing care
•Palliative care benefits
These benefits are designed to help beneficiaries who are recovering from illness or injury. In order to meet eligibility for long-term care coverage through Medicare, a beneficiary must be hospitalized in an approved hospital for at least three days. From there, they must be admitted to a Medicare-certified nursing facility within 30 days of the hospital patient’s visit. Under Original Medicare, long-term care benefits are capped at 100 days. Once this amount is exceeded, the recipient is responsible for 100 percent of the costs.
In addition, the beneficiary must have a need for physical or occupational therapy as well as a medical condition that requires qualified nursing services. However, it is important to note that coverage is limited and only available for the short term.
As they age, most people prefer to live at home. But if you stay home and need home care for an extended period or permanently, Medicare only pays for it temporarily. For example, Medicare Parts A and B cover part-time or intermittent nursing care (skilled nursing care needed less than seven days a week or less than eight hours a day) for only 21 days.
Medicare does not pay for 24-hour home care, meals delivered to your home, household services such as groceries, cleaning and laundry (when these are the only services needed), or help. personal care such as bathing dressing or using the bathroom.
LONG-TERM MEDICAL BENEFITS
Medicare Advantage plans offer the same coverage as Original Medicare, so they also cover qualified services or rehabilitative care for up to 100 days. However, recent policy changes now allow all Medicare Advantage plans to cover additional health care benefits for “daily maintenance.” These benefits can include assisted living activities, transportation to medical appointments, post-hospital meals, adult day care, home security modifications, to name a few. only a few.
Some plans offer a benefit, others may offer more in a calendar year, and the plan will likely require prior authorization and impose network restrictions. Medicare Advantage plans do not provide benefits for nursing home care or assisted living.
What are the chances that you or a loved one will need long term care services like these at some point in your life?
•Aid to life
•Household services and chores
It turns out the odds are pretty good. Health care statistics predict that 7 in 10 people who turn 65 this year will need long-term care at some point in their lives. But these treatments can be very expensive. What options are available to help people with long term care costs?
TRADITIONAL LONG-TERM CARE POLICY
Long-term care insurance will cover or reimburse all or part of the long-term care costs.
Many long term care insurance policies have limits on how long or how much they will pay. These policies can also become expensive over time. Insurance companies may take health concerns into account when determining eligibility for coverage.
The older the applicant, the more likely they will not be eligible. In 2019, almost a third of claimants aged 65 to 69 were denied coverage.
The type of coverage depends on the person’s health, financial situation, age at the time of application and other factors. If you want to consider purchasing a long term care insurance policy, you should consult a professional advisor who is familiar with these policies and the different options.
If long term care insurance is not a viable option for you because of its cost, consider your state’s Medicaid program.
As the primary payer in the United States for long-term and nursing home care, Medicaid is a joint program between the federal and state governments. Each state has its own registration process, qualification criteria and policies.
Generally, Medicaid is more of an option for people with low income and household assets. Having both Medicaid and Medicare should cover most of your long-term care expenses.
If your assets are too high, you will not be eligible for Medicaid. This means that you may have to exhaust your financial resources before you become eligible.
COMBINED OR HYBRID PRODUCTS
Consumers tend to worry about losing the money they spend on long-term care insurance if they don’t use it.
In recent years, insurance companies have taken steps to allay these concerns. These relatively new products combine life insurance and long-term care insurance. The idea is that the benefits of the policies will always be paid, in life insurance or in long term care. A policyholder can access some or all of the long-term care policy death benefit that meets business requirements. These combination products are still evolving.
KEY POINTS TO REMEMBER
•Don’t rely on Original Medicare to pay for your long-term care costs.
•Some Medicare Advantage plans may offer services and supports, but the benefits may be limited.
•The sooner you start learning about long-term care, the different options, and what’s available in your community, the better.
•Work with a trusted financial advisor to come up with a plan to cover the costs.
•Be sure to carefully read the fine print of any long term care policy that you are considering.
(Joel Mekler is a Certified Senior Advisor. Email your Medicare questions to [email protected])