If You Think Medicare Covers All Aging Needs Think again.
Medicare is Medical Care. It covers physician care, hospital care, post-acute care (care after a hospital stay), such as a skilled nursing facility or home health care for rehabilitation. In all cases, however, there are limits.
1) Hospice is covered and it now appears doctors will be paid for end of life discussions.
2) Medicare Advantage plans may cover a few more things than traditional Medicare supplemental plans, such as fitness classes and limited eyeglass and dental care. These plans do not cover long term care whether at home or in a facility.
3) Part D covers pharmaceutical costs up to a point. With the Affordable Care Act the “donut hole” will be closing, but still cancer drugs and other specialty medications can cost up to $100,000. You are still responsible for co-pays up to your deductible amount. In Medicare you are generally responsible for 20% of the cost.
4) Medicare covers certain “assistive” devices, including walkers and some types of wheelchairs, but there are many restrictions about what is available. High co-insurance means you also must pay for a substantial portion yourself.
Medicare does not cover long-term care! It did not cover most of the costs associated with my mother’s care as noted in my previous blog. Nor does it cover non-medical care needed by people with dementia or long-term disabilities.
Overall, long-term care insurance coverage is inadequate. It is expensive and typically covers around three or slightly more years of care and not always at full cost. If you need long term care, and have means, you must spend them (called ‘spend down’). If you don’t have means, there is Medicaid for low-income seniors and there are a few programs available in some communities that help.
“Most people don’t realize what they will face, but there are some positive steps people can take to prevent what can often can be an emotional and personal disaster for the person and the family,” explains Denise Klein, Executive Director, Wider Horizons, in Seattle, WA(http://widerhorizonsvillage.org/), former Executive Director of Senior Services in Seattle for 10 years. She has worked in the fields of aging, health, and long-term care for more than 40 years.
“If you have assets the question becomes how to finance what you may need,” she says. ‘Long-term care insurance has limitations and it is increasingly difficult to find. Companies like MetLife that entered the long-term care insurance market early, no longer offer long-term care coverage. It is expensive. The older you are, the more expensive the premiums become. If you do wish to purchase it, an insurance broker can help you navigate the options. But, basically, you must buy it before you need it,” she stresses.
The underlying problem, Denise believes, is that there is not enough public money in the current health care system as it is structured and financed to cover all the costs people will face. Additionally, there is a distinct unwillingness to pay in advance, through taxation, because many people do not believe they will ever need such care and they certainly don’t want to need these kinds of services.
What to do if you have Assets
Denise suggests that couples who have assets develop an estate plan and create a trust.
“A trust enables a couple (now possibly including married gay couples) to transfer assets so the non-disabled spouse will continue to have access to those assets. Setting up a trust and transferring assets must be done some years before care is needed. It requires the partner needing care to go on Medicaid. This allows the other partner to shield both assets and income from having to pay for the long term care needed by their spouse. Setting up a trust is complex. Anyone considering this should consult an experienced elder law attorney,” Denise says.
A critical issue with long-term care services, including services in certain residential communities, and with long term care insurance is: you must buy it before you need it. If you have a significant disability or issue you will not quality. If you plan ahead and have sufficient resources, however, you have a chance to successfully meet your long term care needs for at least several years.
If You Run Out of Money
Running out of money is a danger even with apparently adequate assets. If you run out of your own assets or you have a trust that runs out of assets, a spouse or family can still pay privately for care until that is no longer financially feasible. This is where the rubber hits the road for far too many people.
Except for people with virtually unlimited assets, many people often cannot afford or be assured all their long-term care needs can or will be met. Also, most people don’t know that nearly 50% of the people on Medicaid are not poor women and children; they are seniors who need long-term care. They are often women whose husbands were sick first and their husbands’ care exhausted both the family’s assets and the wife-caregiver.
Long-term care can last for many years and can be very expensive–especially if it is provided in a facility. When assets are gone, a person typically becomes eligible for Medicaid. If one is poor to begin with, and has no assets and a low income, Medicaid eligibility happens earlier.
Coverage of Last Resort: Medicaid
Medicaid covers many long-term care services Medicare does not, such as long-term home care and personal care, which includes assistance with dressing, meal preparation, bathing and toileting. It also covers care in residential facilities like skilled nursing homes, adult family homes and other board and care facilities.
Some skilled nursing homes that do not accept new Medicaid patients will “convert” a patient to Medicaid. This means they will accept Medicaid only after the patient has paid privately for several years.
“What this may mean, however,” Denise says, “is that an individual with low income who needs long term care in a residential facility may be placed in a different county from where they have lived, making it difficult for family and friends to visit. This is especially true for those with ‘heavy’ care needs—for example people in the later stages of Alzheimer’s disease. This is an incredible emotional and financial burden for families.”
When someone becomes eligible for residential Medicaid coverage, the state requires the individual to turn over their social security and pension income up to the full cost of care. If there is a gap between what the social security and retirement funds are and care costs, the state will make up the difference. This part of Medicaid is similar in most states, but not all. Medicaid regulations vary by state, such as the amount of a personal care allowance, among other things.
Where does a Person Find Information?
“Much good information is available,” Denise stresses. “Finding good information, however, is part of the problem. Most states have a senior health insurance information program (known as SHIBA in Washington State) in their state Insurance Commissioner’s office. Every state has an Area Agency on Aging program with offices in each county. These local agencies are a good place to start. There are Senior Services programs and Senior Information and Assistance programs in nearly every county. People can find information by contacting the National Association of Area Agencies on Aging: http://www.n4a.org/. This site can point people to agencies and services where they live.
For private pay services, Denise suggests people contact Aging Life Care http://www.aginglifecare.org, formerly the National Association of Private Geriatric Care Managers. These care managers are not licensed as care managers, but they are credentialed and many are licensed social workers as well.
As Denise says: “There are no easy answers. You need a navigator to get through a system whose hallmark is its complexity.”
Coming Next: Home-based and Community Models Built Around the Individual’s Needs and Wishes
People should not have to face what my mother and I faced. Nor should they have to leave the comfort and familiarity of their homes to receive the care they need. Coming next learn about MediCaring Communities, a new model that revolves around the priorities and needs of seniors and their families. http://www.medicaringcommunities.org
Kathleen O’Connor© July 10, 2015