Introduction: Ben and Sally were retired and looking forward to their golden years. They had faithfully put away enough that, when added to their social security and retirement pension, would allow them to live comfortably, although not extravagantly. They were 5 years into their retirement when disaster hit! Ben had a stroke. It was a significant one. He could no longer walk or feed himself and he had trouble talking. After the hospital, Ben spent several months at the skilled nursing facility (SNF) for rehabilitation. The medical personnel did all they could as did the rehabilitation staff. In the end, walking, talking, and feeding himself were just not going to be on the agenda for Ben. So now, after the SNF, Ben is an an Assisted Living Facility (ALF). How is Sally going to manage financially?
Probability of Needing Long Term Care: Over the years I have had a lot of Ben’s and Sally’s in some form or another. Trust me when I say, these things really do occur. The US Department of Health and Human Services tells us that “people who reach age 65 will likely have a 40 percent chance of entering a nursing home. About 10 percent of the people who enter a nursing home will stay there five years or more…..” And Medicare tells us that “This year, about nine million men and women over the age of 65 will need long term care. By 2020, 12 million older Americans will need long term care. Most will be cared for at home; family and friends are the sole caregivers for 70 percent of the elderly”.
Medicare: So what does Medicare pay for when it comes to this type of care. The government website states as follows: “Generally, Medicare doesn’t pay for long-term care. Medicare pays only for medically necessary skilled nursing facility or home health care. However, you must meet certain conditions for Medicare to pay for these types of care. Most long-term care is to assist people with support services such as activities of daily living like dressing, bathing, and using the bathroom. Medicare doesn’t pay for this type of care called “custodial care”. Custodial care (non-skilled care) is care that helps you with activities of daily living. It may also include care that most people do for themselves, for example, diabetes monitoring. Some Medicare Advantage Plans (formerly Medicare + Choice) may offer limited skilled nursing facility and home care (skilled care) coverage if the care is medically necessary.”
Further, you will find that even if we are talking about skilled nursing care as opposed to custodial care, Medicare generally will pay a maximum of only 100 days.* (See page 13) That 100 days comes with several limitations. One of the most important is that, generally, you enter the SNF within 30 days of at least a 3 day stay at a hospital. (See page 14) Typically, we say that anything in excess of the period for which Medicare will pay is what we call “Long Term Care.” In other words, Medicare is “short term care.”
What other programs are available for long term care?
Medi-Cal: Medi-Cal is a joint Federal-State program. It is referred to as Medicaid in most of the rest of the country. The rules are different in each state so what applies in California (the perspective from which I am writing this article) may or may not govern elsewhere. It pays for a SNF. It rarely pays for in-home-care or an ALF. The program is extremely discriminatory. Many people would say if you are rich, you don’t need Medi-Cal and if you are poor, you almost automatically qualify. But if you are of the middle class you must use some of the various techniques to qualify.
VA Aid & Attendance Non Service Connected Disability Pension: The Aid & Attendance Disability Pension benefit is a Federal Program administered by the Department of Veterans Affairs (formerly know as the Veterans Administration). It can pay tax free benefits up to $24,239 per year. It pays whether the care is in-home, an ALF, or a SNF; so, even though Medi-Cal is unavailable, it is very useful in the first two situations. Again, the middle class generally must use some of the various techniques to qualify.
VA Aid & Attendance–How Can I Correctly Choose Help for my Application Process? Who one chooses can mean the difference between success and failure. Remember, if you are denied, you may not be able to reapply for up to a year or longer. Download our complimentary report for a behind the scenes look at the different types of people you can consult and the dirty underbelly of the veterans aid & attendance industry.
*The 100 day maximum can be reinstated once you are out of the hospital or SNF for at least 60 days and in a few other limited circumstances.