Who pays for Long Term Care?
As America ages, the need to address how we pay for long-term care becomes increasingly urgent. A recent study indicates three out of four Americans age 65 or over may need long-term care sometime within their lifetime. Most are ill-equipped to deal with the enormous cost – just one in four Americans can afford the cost of long-term care for a year.
Although Medicare covers skilled nursing care up to 100 days for a spell of illness, (with a qualifying three-day hospital stay) in fact the average coverage under Medicare is 10 – 20 days. Coverage depends on the degree of skilled care needed. Once a resident is stabilized in a skilled nursing facility, Medicare typically does not pay.
Medicaid (known as Medi-Cal in California)
More than two thirds of all nursing facility residents rely on Medi-Cal or Medi-Cal managed care. The proportion is even higher at facilities caring for people with developmental disabilities, where nearly 100 percent of clients are Medi-Cal beneficiaries. Unfortunately, seniors must deplete their life savings and impoverish themselves in order to become eligible for Medicaid.
The objective of the Medicaid program is to provide essential medical care and services to preserve health, alleviate sickness and mitigate handicapping conditions for individuals or families receiving public assistance, or whose income is not sufficient to meet their individual needs. The covered services are generally recognized as standard medical services required in the treatment or prevention of diseases, disability, infirmity or impairment.
States design their own programs within broad federal guidelines. Thus, Medicaid programs vary from state to state.
Medicare
Medicare, administered by the U.S. Department of Health and Human Services (HHS), is a federal insurance program for (1) people age 65 and over: (2) people disabled for at least two years; or (3) people suffering from chronic kidney disease. Nursing facility coverage under Medicare is very limited — the average length of stay paid for by Medicare is 26 days.
Medicare pays for approximately 15 percent of nursing facility patient days in California.
Long Term Care Insurance
Long term care insurance can protect an individual’s assets and provide peace of mind. A good long- term care insurance policy will cover all levels of care, especially personal care, and all settings, including facility care, community adult day care, assisted living facilities, and nursing facilities.
The cost of a long term care insurance policy primarily depends on the age of the policy holder when purchased. Visit the American Association for Long Term Care Insurance for a recap of services.
Recognizing the growing need for better insurance coverage, the State of California formed the Partnership for Long-Term Care, an innovative program offered by the Department of Health Care Services in cooperation with a select number of private insurance companies. The insurance companies which participate in the program have agreed to offer high quality policies that meet stringent requirements set by the Partnership and the State of California. For more information, visit the California Partnership for Long Term Care.
Supplemental Security Income/State Supplementary Programs (SSI/SSP)
The SSI Program is a federally funded program which provides income support to those aged 65 or older, blind or disabled. SSI benefits are also available to qualified blind or disabled children. The SSP Program is the state program which augments SSI. Both SSI and SSP benefits are administered by the Social Security Administration (SSA) Eligibility for both programs is determined by SSA using Federal criteria. A person who qualifies for SSI also qualifies for SSP. Benefits are in the form of cash assistance.
Third Party Payors
This category of financing includes individual insurance plans other than Medicare or Medi-Cal; Veteran’s Benefits; Municipal Assistance benefits; and long term care insurance policies. These sources account for about nine percent of long term care payment.