Paying For Long Term Care
Serving Families and Individuals in the Anniston, Gadsden, and Talladega, AL Areas
As the population continues to age, one of the main concerns people have about themselves or their loved ones is how to pay for long term care in Alabama. The cost of long term care depends on the level of care that you need. In home care is not as expensive as nursing home care. Assisted living costs are somewhere in between in most cases. In home care costs vary depending on the level of care needed and the number hours per day that care is necessary. Figuring out how to pay for long term care as part of your estate plan can be complicated but, in the end, there are only 3 ways to pay:
- YOU PAY;
- YOU HAVE LONG TERM INSURANCE TO PAY;
- THE GOVERNMENT PAYS
To learn more about paying for long term care and other estate planning issues, register to attend one of our free estate planning workshops or call us at 256-792-3193 to register.
If you do not have long term care insurance, you will have to pay for long term care out of your pocket. If your income is sufficient to pay for care, that is wonderful. If not, you may have to pay the difference by depleting your assets each month. With the average cost of nursing home care in the Anniston, Alabama area being about $6,000 a month, it does not take long to begin depleting your assets quickly if you do not have adequate income. Anticipating these costs is an essential part of your estate plan that you should address with your estate planning attorney.
Long Term Care Insurance
Many people have long term care insurance in Alabama. Most of these insurance products pay for in home care, assisted living care and long term nursing care. Unfortunately, most people do not have long term care insurance and the premiums are often too high by the time they think about getting it. Traditional long term care policies provide a daily amount to be paid to your caregiver or facility. Some of the policies have limits on that daily amount and some have time limits as to how long they pay. Once the time is up, you would have to begin paying out of pocket for care.
There are some new products on the market because traditional long term care policies were costing the insurance companies more than they originally anticipated. These new products do not require premium payments in the traditional sense. Instead, they use assets such as bank accounts, IRA’s and life insurance as collateral to provide a long term care benefit to you should you need it. If you have significant assets, these products are worth looking into as part of a comprehensive estate plan.
The Government Pays
Veterans Pension Benefits (Aid and Attendance)
If any group has earned help with paying for long term care expenses, it is our veterans. There is a benefit known as Veteran’s Pension (also known as Aid and Attendance) available to some wartime and older veterans through the VA to help offset long-term care and medical costs. These benefits are non-service connected and can pay in excess of $25,000 per year tax-free to the veteran or spouse. Sadly, only about 5% of eligible veterans are receiving this benefit because the Veterans Administration is not required to tell veterans about these programs. If you qualify, this benefit can be used to offset the costs of in home care, assisted living facility costs as well as long term nursing home care. An accredited VA attorney can help you determine whether you qualify and apply for the benefit for you.
Medicare versus Medicaid
Many people mistakenly believe that Medicare will pay their long term care expenses. However, that is not true. In general, Medicare covers skilled nursing care such as physical therapy or injections that require the assistance of medical professionals or rehabilitation staff, and limited home care, for a very short period of time (100 days) per illness. Assistance with activities of daily living (ADLs) s such as dressing, bathing, medication management, etc. is not typically covered by Medicare. Additionally, Medicare only pays 80% of those costs of skilled nursing care. The other 20% that you must pay can be devastating.
Medicare will only provide limited benefits for “skilled care,” such as physical therapy or injections that require the assistance of medical professionals or rehabilitation staff, for a limited period of time. This is in contrast to “custodial care,” which is not covered by Medicare and provides much-needed assistance with the tasks of everyday living such as bathing, eating, dressing, etc.
Medicaid on the other hand, does cover custodial care, as well as skilled care on a long-term basis and provides much-needed assistance with the tasks of everyday living such as bathing, eating, dressing, etc. There are no arbitrary time limits and no burdensome co-pays (although your income may need to go to the nursing home under the “applied income” rules). Patients can get the care they need and families can rest easy knowing they won’t be weighed down with long-term care costs. Medicaid does not cover in home care or assisted living except in very limited circumstances.
Unfortunately, Medicaid will only pay for your care if you meet certain income and asset limitations. There are several Medicaid myths out there about Medicaid, you can learn more about planning for Medicaid on our Medicaid Crisis planning page. In determining eligibility for Medicaid, your assets are divided into two categories: countable and non- countable. As you probably guessed, non-countable assets are exempt from calculations (and safe for your keeping!). These are not factored into Medicaid’s asset limitations.
You are allowed up to $2,000 in total countable assets in Alabama in order to qualify for the Medicaid program. Assets over this amount are subject to “spend down,” meaning you will have to spend the assets completely before you are eligible for benefits. If you have more than $2,000 in countable assets, Medicaid will not pay for your care. It takes planning ahead in most cases to protect your assets and qualify for Medicaid. Learn more Medicaid Crisis planning and protecting your assets. Medicaid rules are very complicated. For every rule, there are several exceptions. As Alabama Medicaid attorneys we can help guide you through the maze, protect your assets get you qualified.
To learn more about paying for long term care and other estate planning issues, register to attend one of our free estate planning workshops or call us at 256-792-3193 to register. You can also click here to get a copy of our Alabama Medicaid Guide to learn more.
Content copyright © Adams Miller Law, LLP.