Paying for Aging Services
True or False:
you need long-term care, the government will pay for it.
False. Wrong answer? You aren't alone. According to a recent AARP survey, 55
percent of American adults thought the same thing. That's why, when it comes to
paying for aging services, there are only two things to remember: plan and
Proper planning doesn't start in the emergency room or the nursing home. It
starts by figuring out your preferences, understanding what needs might arise
and learning what the costs might be to pay for the services you will need and
want. That may mean meeting with your lawyer, taking a trip to the bank or
buying a long-term care insurance policy.
Whatever plan you make, saving is the only way to make it happen. The cost of
getting older continues to rise, but if you start saving now, you'll make a
But what if you or a loved one has not been able to save enough to cover your
needs? Luckily, we live in a country that values older adults and provides a
safety net for all Americans. That system, known as Medicaid, is an option. But
it's an option only for those who have nothing left to spend.
Here's a general overview of the major aging-services payment options that may
help you as you age:
Private Payment Sources
Long-term care insurance is a type of insurance designed to
cover people's care and services costs need as they age. Traditionally, it was
used for nursing home costs. Now, it covers a variety of aging services,
including assisted living, retirement communities and adult day care.
Long-term care insurance typically pays daily rate to care providers. Because
every policy is different, find out exactly what levels of care and services
your potential insurers will cover and how far the policy's payment cap might
take you before you exhaust the benefit. That way, you can research providers
with an open mind, and not a limited budget.
Public Payment Options
Medicare is a health insurance program for
people over the age of 65 and certain disabled individuals. Medicare covers a
limited amount of long-term care, including:
home care after a hospital stay of at least three days. In addition, this
coverage requires substantial insurance co-payments after the first 20
days, and can be used for no more than 100 days.
services through a home care agency. These can be delivered wherever you
live, including an assisted living facility. Medicare does not usually
cover assisted living costs.
only if the elderly individual is homebound and needs therapy or skilled
nursing care, according to their physician's plan. Medicare coverage is
limited to services that will help an elderly person recover from a
medical problem. It may not extend coverage for people with chronic care
needs, like those with Alzheimer's disease.
Medicaid is a program that covers impoverished individuals’ health
care costs. Because of high long-term care costs, however, nearly 65 percent of
all nursing home residents are Medicaid recipients. In Oregon, Medicaid may pay
for in-home services, assisted living/residential care, or nursing home care
for individuals that are eligible.
To qualify for Medicaid, you must complete a state application and verify that
you no longer have any savings or other assets that you pay for your health
care services. Federal policy requires states to examine your financial history
for the previous five years to assure you have not transferred assets out of
your name to avoid using them for health care costs.
This all may seem confusing, but remember, planning and saving is the only way
to keep the most options open for you.
Benefits CheckUp from the
National Council on the Aging
can help you find programs for people ages 55 and over that may pay for some of
their costs of prescription drugs, health care, utilities, and other essential
items or services.
eligibility for U.S. Government benefits
National Care Planning Council's Guide to Long Term Health
Financing Long-term Care 101