SENIOR Magazine Medicare and Long Term Care ~ Who Pays for What? Courtesy of Benchmark Financial Services

SENIOR Magazine Medicare and Long Term Care ~ Who Pays for What? Courtesy of Benchmark Financial Services

Collin SENIOR Magazine

Medicare and Long Term Care ~ Who Pays for What?

Article courtesy Benchmark Financial Services

Without a crystal ball, none of us can know when or if we’ll ever need help taking care of ourselves. Whether from a short or long term situation caused from a bad fall, dementia, stroke, or any other debilitating medical condition, we may one day not be able to feed ourselves, bathe, dress, go to the bathroom without help, or make sound, safe decisions while performing our daily activities.

National cost of nursing home care three years ago averaged $171/day or $5000/month. Those figures are higher today. Paying for even six months of assisted or fulltime care in your home can severely deplete savings. This article highlights how some of these potential expenses can be paid for while also minimizing negative impact and unnecessary outflow from your savings.

Medicare or Medicaid may offer coverage. Other sources of funds, aside from personal savings, can include using cash value you may have in life insurance policies, taking out a home equity loan, buying an immediate annuity, or purchasing a long term care insurance policy.

On the www.Medicare.gov website, under paying for long term care, you’ll find the following statement: “Medicare generally doesn’t pay for long-term care. Medicare also doesn’t pay for help with activities of daily living or other care that most people can do for themselves”. But Medicare will cover some short term home healthcare, skilled nursing, and hospice care. For example, if you meet Medicare’s medical requirements and enter a certified skilled nursing facility directly from a hospital, Medicare will pay the facility for the first 20 days of your stay. In 2010, you’re responsible for $137.50 per day facility charges for the 21st-100th day. Medicare won’t cover any part of stays over 100 days. Some Medicare-approved, short term, physician-prescribed home healthcare and approved durable equipment for home use may also be partially paid by Medicare.

Some people qualify for additional government help through Medicaid. Generally in Texas your monthly income must be less than $2,022 for singles and $4,044 for married. You can’t have more than $2,000 in assets/investments including cds, bonds, stocks, mutual funds, gold, mineral rights, bank accounts, etc. if you’re single and $3,000 if you’re married. When people apply for Medicaid, states are also required to find out if assets were given away or re-titled in an attempt to meet Medicaid’s qualifications. If found, penalties are assessed and heirs can also be held responsible for paying back what the government feels is owed. Because the laws are specific and also vary from state to state, it’s best to contact your state or local Medicaid office for detailed information.

If you haven’t looked closely at the newer long term care policies available today, you should. More flexible features and their affordable premiums make them a vital component for protecting your savings from the potential drain of long term care medical expenses. Historically sold as individual plans, if a person died without needing long term care the benefits would stop. Today, many policies permit unused benefits to transfer to a surviving spouse. Premiums are calculated by age and health at application, as well as by the type and dollar amount of coverage chosen, as well as the elimination period. The elimination period can range from 0 days to 365 days and is the time that must lapse before any benefits are paid: the shorter the elimination period, the higher the premium. By deciding, for example, that your savings would be used to cover the first month or two of a potential assisted living cost can help reduce your premium. A year in a nursing home today may cost $65,000. If a healthy 60 year-old paid $3,000 a year for a long term care policy, he or she would reach 80 before spending $60,000.

Regardless of your financial status, it’s very important to update yourself on the options available today to make sure you are doing all you can to protect and help ensure that you and your spouse (if applicable) will be able to maximize and use the assets you have worked a lifetime for.

For more details about the newest long term care policies, immediate annuities or how to tap into any life insurance policies, please call Tucker Thompson, Benchmark Financial Services, at 972-548-1629 or 888-247-1829.