Financial Help for Long Term Elder Care – What are the Options?
The cost of medical care is a common worry for older adults and caregivers. Expenses for long-term elder care can add up and use a significant part of someone’s monthly income, even for families who think they’d saved enough money to cover it.
People pay for long-term care in various ways, but often, they have to rely on various payment sources such as government programs including ALTCS eligibility, personal funds, and private financing options.
Being able to offer advice is important and for that, you need to understand the various options.
Government Programs
There are government programs that some older adults may be eligible to apply for. Caregivers can help by learning about the different sources of financial help and assisting older adults in applying for the aid.
There are several federal and state programs that might provide help with healthcare-related costs.
Centers for Medicare Medicaid Services (CMS)
CMS offers several programs, however, the benefits and eligibility requirements can change and some of the benefits differ from State to State. It’s best to check the latest information with CMS or the individual programs directly.
Medicare
This Federal Government health insurance program pays some medical costs for people aged 65 and older, and for all people with late-stage kidney failure. It also pays some medical costs for those who receive Social Security Disability Income for 24 months.
Ongoing personal care at home, long-term care, or assisted living are not covered.
Medicaid
Some people may qualify for Medicaid which is a combined Federal and State program for low-income people and families. It covers the cost of medical care and some types of long-term care for people who have limited income. There are eligibility requirements that have to be met. Who is eligible and the services covered vary from State to State.
There are government programs that some older adults may be eligible to apply for.
Program of All-Inclusive Care for the Elderly (PACE)
PACE is an option in some States. It’s a Medicare program that provides care and services to people who would otherwise need care in a nursing home.
PACE covers medical, social service, and long-term care costs for frail people. It may also pay for some or all of the long-term care needs of a person with Alzheimer’s disease.
State Health Insurance Assistance Program (SHIP)
This is a national program offered in each state. It provides counseling and assistance to people and their families on Medicare, Medicaid, and Medicare supplemental insurance matters.
Department of Veterans Affairs
This department may provide long-term care or at-home care for some veterans.
Social Security Administration Programs
Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs provide financial assistance to people with disabilities.
SSDI is for people under the age of 65 who are disabled according to the Social Security Administration’s definition. Processing an SSDI application can take three to five months.
SSI is another program that provides monthly payments to adults age 65 and older who have a disability. To be eligible, income and resources must be under certain limits.
National Council on Aging (NCOA)
NCOA is a private group and has a free service called BenefitsCheckUp. This service helps people find Federal and State benefit programs that they may be eligible for.
The programs can help pay for heating bills, prescription drugs, meal programs, housing, and legal services.
Private Financing Options for Long-Term Care
As well as government funds, there are some private payment options. Which option is best depends on many factors such as a person’s age, health status, personal finances, and risk of needing care.
Long-Term Care Insurance
Long-term care insurance covers various types of long-term care and benefits, including hospice and palliative care. The exact coverage depends on the type of policy and what services they cover.
Many companies sell long-term care insurance, so it’s a good idea to shop around and compare policies.
Reverse Mortgages for Seniors
This is a special type of home loan that allows a homeowner to convert part of the ownership value in his or her home into cash. No repayment is required until the borrower sells the home, no longer uses it as a main residence or dies.
Life Insurance Policies for Long-Term Care
Some life insurance policies can help pay for long-term care. Some policies offer a combination product of both life insurance and long-term care insurance.
Using Annuities to Pay for Long-Term Care
Another option is to enter into an annuity contract with an insurance company to help pay for long-term care services. In exchange for a single payment or series of payments, the insurance company will send you a series of regular payments over a specified period (an annuity).
Trusts
Trusts are the legal entity that allows a person to transfer assets to another person, called the trustee. Once the trust has been established, the trustee manages and controls the assets for the person or another beneficiary. Two types of trusts can help pay for long-term care services: charitable remainder trusts and Medicaid disability trusts.
