Planning for potential healthcare needs
The high cost of long-term care has made planning a critical issue for most middle-class seniors and their families. In fact, most seniors will likely require some form of long-term care. Sadly, many are unprepared for the significant financial burden it places on their family’s hard-earned savings. Financial devastation looms for a family facing ongoing care at a rate of $10,000 or more per month.
Long-Term Care Options
While some seniors can afford private-pay care, the cost of long-term care will wipe out the savings of all but the wealthiest families in a matter of years. Those who have planned ahead by purchasing long-term care insurance have a degree of certainty and peace of mind, knowing they will have less need to rely on other sources in the future. Unfortunately, many can’t afford the high cost of long-term care insurance, and some, because of age or medical condition, cannot qualify for long-term care insurance at all. If you have long-term care insurance, you should be aware of what your policy covers. Many policies have high deductibles or cover only a short period of care in a facility. In fact, many who have long-term care insurance still have to resort to Medicaid to pay for their care.
Medicaid Eligibility
Another option for paying for care is Medicaid. A joint federal-state program, Medicaid provides medical assistance to low-income individuals, including those who are 65 or older, disabled, or blind. Medicaid is the single largest payer of nursing home bills in America and serves as the option of last resort for people who have no other way to finance their long-term care. Although Medicaid eligibility rules vary from state to state, federal minimum standards and guidelines must be observed.
While Medicaid eligibility for long-term care was not difficult in the past, there has been a steady drift toward more complex and restrictive rules, the latest being the Deficit Reduction Act of 2005. These changes have created complex eligibility requirements for those seeking Medicaid benefits. It’s no longer as simple as reviewing one’s bank statements. There are myriad regulations involving look-back periods, income caps, transfer penalties, and waiting periods to plan around. As Congress wrestles with a replacement for the Affordable Care Act, the future of both health care and Medicaid as an option remains up in the air.