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How does Medicare address long term care?

by Jack Lenenberg

Medicare ConfusionStudies show that 70 percent of Americans that reach Medicare age of 65 will need long term care at some point in their lives.

This care may be received at home, in assisted living, or within a skilled nursing facility.  The US Department of Health and Human Services has determined the average annual cost of nursing home care is $81,030 for a semi-private room and $90,520 year for a private room, yet most people underestimate the cost of long term care.

And most people mistakenly believe Medicare will  pick up the tab, which typically-and unfortunately-is often not the case.

Understanding Medicare and long term care

If you are receiving care in your own home, Medicare will only pay for your skilled care visits.  In other words, services performed by a skilled medical professional if you are recovering from an acute illness, condition or injury.  To receive Medicare benefits, your doctor must certify to Medicare that these skilled services are necessary and that you are required to be housebound to receive these services.

Custodial care, such as bathing, eating, dressing, will be covered by Medicare only if the custodial care is incidental and concurrent to your need for skilled acute care.

Should you require long term care services in a skilled nursing facility, Medicare will cover the cost of your care up to 100 days, but only after you have satisfied a hospital stay of at least 3 days, and only if you need daily medical attention. For example, physical therapy after a joint replacement or wound care after surgery.

It is important to note that Medicare will cover 100% of your full costs for only 20 days. From days 21-100 you are responsible for a co-payment of $157.50 per day (2015). Medicare Supplement insurance will pick up this co-payment.

After 100 days of skilled nursing care, you are responsible for all costs.

Clearing the misunderstanding 

Some of the confusion surrounding Medicare and long term care services stems from the fact that Medicare helps to cover certain services at home, but only if these services are medically necessary due to an acute medical need.  Medicare specifically excludes from coverage custodial care from chronic and disabling illnesses, however.  Custodial care refers to ongoing daily assistance with everyday activities of daily living such as bathing, eating, dressing and toileting.  Adding to the confusion is that even though skilled acute care and custodial care are markedly different, each type of care is generally provided by the skilled nursing facilities and home care agencies.

Either way, after 100 days of receiving Medicare benefits you are entirely responsible for your costs of care.

How does Medicaid fit in?

Additional confusion arises from the fact that people mistake Medicaid for Medicare.

Medicaid does in fact cover 100% of long term care custodial costs delivered within a state licensed and certified Medicaid nursing facility.

Medicaid, however, is an impoverishment program and will only provide benefits to individuals without assets and without income.

Being responsible for your care

The high costs of long term care can drain your retirement assets and place a burden upon your loved ones.  Planning for future long term care expenses will help mitigate these costs, helping to preserve your savings and assets for other important needs.  Having a plan will also allow you to receive your care with dignity in the setting you choose, whether this is in your own home or in assisted living.

There are a number of options today when planning for long term care.  There are traditional long term care insurance policies, as well as hybrid long term care plans that will return your entire premium to you should care not be needed. 

To learn more about your available options, simply call us at (800) 891-5824 or complete your quote request form.

We are independent specialists and have helped our clients plan for long term care since 1998.  We work with all of the leading providers of plans including Lincoln Financial Group, Securian Financial, John Hancock, Mutual of Omaha, State Life Insurance Company, Transamerica, Pacific Life, Nationwide, and more.  Compare your options today.

We look forward to hearing from you.

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Jack Lenenberg

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