Long Term Health Care/Custodial care

As a follow up to my blog of November 15th, I would like to discuss custodial and long term care. As I had mentioned earlier the cost of providing basic care to meet the daily needs for yourself or a loved one can be quite exorbitant. Unless you have an involved family that is able and willing to provide care, or have enough financial resources available the cost of providing care for yourself or a loved one is very difficult indeed. This custodial care could include assistance at home with activities of daily living, bathing, dressing, meal preparation, housekeeping, laundry or shopping or attention to these same basic needs in a nursing home or assisted living facility.

This is particularly difficult because when you are disabled or older and income is limited the greatest need is for long term custodial care. Most long term care is provided by families but few families today can sustain the financial and emotional burden of long term care and contrary to popular belief Medicare does not cover all medical costs and only covers about 2% of long term care.

To determine the average cost for Medicare please check the Medicare Rights Center
http://www.medicarerights.org/newmedicarecosts.html


To be eligible for limited nursing home coverage from Medicare certain criteria must be met:

• You must be in an acute care hospital for 3 days prior to entering a Skilled Nursing Facility. An acute care hospital is licensed by the state to provide skilled care.
• The Skilled Nursing Facility must be Medicare certified to provide care by or under the supervision of licensed personnel.
• Your care under Medicare must be skilled care not custodial. Most nursing home care is custodial not requiring licensed personnel for skilled treatment such as intravenous infusion or skilled rehabilitation.
  
  As indicated in my earlier blog the average yearly nursing home cost exceeds $77,000. The cost at average of $19 per hour for home health aide services added onto costs for medication, deductibles, medical supplies or equipment as well as costs to maintain a household can quickly deplete savings when living on a fixed income.

Medicaid, a national program for individuals and families with low incomes and resources is another alternative to paying for long term care. Medicaid is jointly funded by the states and federal government, and is managed by the states. Medicaid is the largest source of funding for medical and health-related services for people with limited income. While Congress and the Centers for Medicare and Medicaid Services set out the main rules under which Medicaid operates, each state runs its own program. As a result, the eligibility rules differ significantly from state to state, although all states must follow the same basic framework.

Over 42 million people a year receive assistance from Medicaid but Medicaid guidelines are based on the poverty levels and to qualify for Medicaid, you must meet income and asset limits set by your state. In most states, income must be below $851 a month (individuals) or $1,141 a month (couples). In some states, you can also qualify if health care costs reduce your income to the state limit. Call your State Health Insurance Assistance Program to find out the Medicaid rules for your state and to check eligibility.

Most people when they reach their 50s should consider adding a long-term care policy to their insurance coverage. Long term care insurance can be costly but can provide you with a payout to cover nursing home costs as well as a variety of in-home health care expenses.

It is however difficult to consider paying these high rates at 50 for insurance you may or may not need for another 25 or 30 years. However if purchased later you will face much higher premiums, as well as run the risk of being denied coverage if you have a pre-existing condition. We all look forward to our retirement and believe we will be able to continue to be healthy and independent well into our later lives. People don’t want to think of getting old and disabled. We buy car insurance on the chance of an accident when only one in 240 will use their car insurance, yet at least one in three will use their long term care insurance.

Many things need to be considered when buying long term insurance:

• Cover the catastrophic need. Lifetime coverage is most desirable, since you will not outlive the benefits.
• Know which policy benefits are important to you.
• Pick a long term care company that is financially strong enough and large enough to be around in 20 or 30 years when you need it.
• Consider Cost of Living Adjustment (COLA) Rider to allow your benefits to keep pace with inflation.
• Pick a premium you can afford and purchase a Long Term Care Insurance plan based on your budget. Remember 50% coverage is better than no coverage. It's important to select a policy where you will be comfortable paying the premium not just today but 20 or 30 years from today.
  
  Long-term care insurance is meant to merely supplement your other income sources such as 401k’s, Social Security and retirement accounts.
  
  For more information check AARP report on long term care.
  
  http://www.aarp.org/research/longtermcare/costs/fs27r_ltc.html