Paying for Long-life Care

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Written by CareScout
Updated November 16, 2023

If you’re an older adult looking for supportive clinical or personal care, you may have many questions–including how you’ll pay for it. The cost of supportive care–or what we call long-life care–and how it is paid will depend on various factors. There are many types of care and each accepts different payment options. The most common forms of payment for long-life care include private pay (you pay the bill), Medicare, Medicaid, and long-term care insurance.

Home care

One type of home care is non-medical home care–help with daily self-care tasks, like getting dressed, bathing, or eating. This type of care usually requires private pay, where you cover the costs on your own. If you have long-term care insurance, your policy might cover those costs. But long-term care policies vary widely, and coverage of home care services may not be included in your specific policy. Review your policy with your long-term care insurance provider to determine eligibility, elimination periods, covered services, and daily maximums.

Another type of home care is medical home care after a hospitalization. This may include nurse visits or physical, occupational, or speech therapy at home. These services are typically covered by Medicare. However, many qualifying factors need to be met before Medicare will cover the costs. Always speak with your individual Medicare plan provider to determine what coverage you may receive and how long Medicare will pay for it.

Home care also may be covered through Medicaid, which provides health insurance coverage to low-income, blind, or disabled individuals. Since Medicaid is a state-run program, coverage varies by state. Many states offer what is called home and community-based waiver services. This means that Medicaid pays for services such as home care, adult day care, or assisted living facilities as an alternative to being in a long-term care nursing home. Not every home care, adult day care, or assisted living community accepts Medicaid as a form of payment. Also, you would need to be eligible for the Medicaid waiver based on your income, assets, and functional ability.

Adult day care

Adult day care centers provide supervised care and activities for adults who need companionship or support with mobility and daily functions. Adult day care is often paid for privately, through long-term care insurance, or by Medicaid community-based waivers. Adult day care is a very affordable option compared to home care or senior living communities. But depending on the area in which you live, you might not have centers available near you.

Adult day care is sometimes covered through long-term care insurance. Review your policy with your insurance provider to determine eligibility, elimination periods, covered services, and daily maximums. You might also be able to use Medicaid to pay for adult day care services. First, you would need to determine if you are eligible for the Medicaid home and community-based waiver and your state would need to consider adult day care a covered service. Additional costs including transportation to and from the center, supplies, etc. may not be covered by the waiver.

Assisted living

Assisted living facilities are residential communities that provide some nursing and personal care services. Some assisted living communities may only accept private pay or long-term care insurance as a form of payment. As with other forms of care, your long-term care policy may or may not cover assisted living. Check with your insurance provider to determine your coverage.

Some assisted living facilities participate in Medicaid’s home and community-based waiver programs. These waiver programs may cover individuals who are assessed to be “nursing home eligible”. However, most assisted living facilities do not participate in the waiver program, and some waiver programs only cover personal care provided in the facility, not room and board. Each state varies considerably in what is considered a Medicaid covered service so always meet with a Medicaid specialist if you are interested in learning more.

Nursing homes

Short term rehabilitative stays in a nursing home may be paid for by Medicare if the preceding hospitalization is deemed qualified by Medicare. Medicare generally covers 100 days of skilled nursing facility care per benefit period. Typically, the first 20 days are covered 100% by Medicare with the remaining 80 days requiring a co-payment. Always speak with your individual Medicare plan provider with specific questions regarding coverage.

If in a nursing home for long-term care, private pay and long-term care insurance are options to pay for care. If you have a long-term care insurance policy, check with your insurance carrier to understand your coverage.  If you are eligible, Medicaid may cover your long-term care expenses in a nursing home that accepts Medicaid payment.

Rate changes according to payment type

As you research different care options, you’ll discover that rates often vary depending on your payment method. If paying privately (out of your own pocket), you will get the “private pay rate”. If switching to another payor source such as Medicare, the care provider will charge Medicare a negotiated Medicare rate. Likewise, Medicaid has specific rates that they charge for services. 

Nursing homes assess rates differently. If you are admitted to a nursing home that accepts Mediciad payment, you will be required to pay the private pay rate until you spend down your assets sufficiently to be Medicaid eligible. Once you have sufficiently spent down your assets, you’ll complete an application for Medicaid. If approved, the rate you pay to the facility is based on your individual income, leaving a small portion for a personal needs account, typically housed within the facility. For example, if you are approved for Medicaid long-term care and your income is $800 per month, $730 may go towards the facility costs and $70 per month might be held for you to use on takeout food, new clothing, haircuts, outings, etc. PLEASE NOTE: These numbers are examples only and are NOT quoted rates for services.

Managing costs for long-life care

As you can see, many factors impact the cost of long-life care. Your individual resources, long-term care insurance policy, and Medicare and Medicaid resources are all considered when paying for care. As always, speak with your individual payor sources to determine eligibility and appropriate use of funds.

The information and services on this site do not constitute medical nor health care advice for any individual problem nor a substitute for medical or other professional advice and services from a qualified health care provider familiar with your unique facts.

Always seek the advice of your physician or other qualified health care provider with any questions you may have regarding a medical condition and prior to starting any new treatment.

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CareScout simplifies and dignifies the aging experience – starting with how we define, deliver, and discover quality aging care. We help older adults and their families navigate the aging journey and find quality care.

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