The best way to deal with the costs of aging services is to plan and save. Long-term care in particular can be very expensive. Planning in advance for potential health needs gives you the most options for meeting them. And contrary to a common misconception, Medicare, other federal programs and private standard health insurance policies do not pay for long-term care. Medicaid is an option, but it is the payer of last resort available only to those who have exhausted all financial resources.
Proper planning should begin long before services are needed. Start by figuring out your preferences, understanding what health needs might arise, and learning what the costs might be for the services you may need or want. That may mean meeting with your lawyer, talking with a financial planner or buying a long-term care insurance policy. Let your family know about your preferences, how you would provide and pay for services, and if you have long-term care insurance or other financial/investment tools to help.
If you, or your loved one, have not been able to save enough to cover the necessary costs, you may need to turn to Medicaid. All personal resources must be depleted to qualify for Medicaid. It’s important to know that if personal income or resources have been given away within three years or assets have been transferred to a trust within five years of applying for Medicaid, eligibility for benefits may not be approved for a period of time.
Below is a brief explanation of the different types of coverage available. If you need help determining how best to pay for care, facility admissions counselors and care managers can often help you understand your options and steer you toward the assistance you need. The National Council on Aging provides a program called BenefitsCheckUp that can also help you find programs for people 55 years and older who need assistance with the costs of prescription drugs, health care, utilities, and other essential items or services.
Long-Term Care Insurance
Traditionally, this type of insurance was used for nursing home costs. Today, long-term care insurance is designed to cover a variety of aging services, including assisted living, retirement communities and adult day care.
Long-term care insurance typically pays daily rates to providers. Because every policy is different, find out exactly what levels of care and services your potential insurers will cover, when and if premium increases occur; and how far the policy’s payment cap might take you before you exhaust the benefit. That way, you can research providers with an open mind, and not a limited budget.
Medicare Payment Options
Medicare is a health insurance program for people over the age of 65 and certain disabled individuals. Medicare covers a limited amount of long-term care, including:
- Nursing home care after a hospital stay of at least three days – this coverage requires substantial insurance co-payments after the first 20 days, and can be used for no more than 100 days.
- Short-term services through a home care agency – these services can be delivered wherever you live, including an assisted living facility. Medicare does not usually cover assisted living costs.
- Homecare – only if you are homebound and have been prescribed therapy or skilled nursing care by your physician. Medicare coverage is limited to services that will assist in recovery from a medical problem. It may not extend coverage for chronic care needs, like those with Alzheimer’s disease.
Medicaid is a program that covers individuals’ health care costs once all of their own resources have been expended.
To qualify for Medicaid, you must complete a state application to verify your assets. Federal policy requires states to examine your financial history for the previous five years to ensure you have not transferred assets out of your name to avoid using them for health care costs.
You can find more information on the Center for Medicare & Medicaid Services (CMS) website.
LIFE (Living Independence for the Elderly)
LIFE is a managed care program for aging individuals who have been determined to need nursing facility care but wish to remain in their homes and communities as long as possible. The program is known nationally as the Program of All-inclusive Care for the Elderly (PACE). All PACE providers in Pennsylvania have the name "LIFE" in their name.
To be eligible for LIFE services, you must be 55 years or older, qualify for nursing facility care through the Area Agencies on Aging, be eligible for medical assistance or able to private pay, reside in an area served by a LIFE provider, and meet criteria to be safely served in the community as determined by a LIFE provider.
LIFE provides a comprehensive all-inclusive package of services, including:
- Primary medical care
- Nursing care and therapies
- Personal care, meals, transportation
- Recreational and socialization activities
- In-patient and out-patient care
- Lab and X-ray
- Eye glasses, hearing aids, and dentures
- Emergency care
- Nursing facility
The LIFE program centers around adult day health centers, where most services are offered. Transportation is provided to and from centers and other services. Home care is provided as needed. If a participant can no longer be cared for in the community, nursing facility placement will occur.
PACE (Pharmaceutical Assistance Contract for the Elderly), PACENET and PACE Plus Medicare
PACE (Pharmaceutical Assistance Contract for the Elderly), PACENET and PACE Plus Medicare are Pennsylvania’s prescription assistance programs for seniors offering low cost prescription medication to qualified persons aged 65 and older. Only medications that require a physician’s prescription are covered. Insulin, insulin syringes and insulin needles are the only exceptions. Over-the-counter medications such as aspirin, antacid, vitamins, etc., are not covered, even if prescribed.
To be eligible for PACE, one must be aged 65 and older, a resident of Pennsylvania for at least 90 days prior to the date of application, and cannot be enrolled in the Department of Public Welfare’s Medicaid prescription benefit. Income for single persons must be $14,500 or less, and income for married couples must be a combined total of $17,700 or less.
To be eligible for PACENET, one must be aged 65 and older, a resident of Pennsylvania for at least 90 days prior to the date of application, and cannot be enrolled in the Department of Public Welfare’s Medicaid prescription benefit. Income for single persons must be between $14,500 and $23,500, and income for married couples must be between $17,700 and $31,500. For more information on the PACE programs and to obtain applications, please visit the PA Department of Aging website.
All of this may seem complicated but the key point to remember is that planning and saving is the only way to keep the most options open for you.