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Paying for Long-Term Care Planning and Financing Long-term Care Planning for long-term care is complicated. Each person's needs are unique; therefore, the cost of long-term care varies greatly. Some social and physical assistance is available for free or at a low cost, while very expensive nursing home or home health services can cost upwards of $200 per day. There are many different ways to finance long-term care. You will probably need to use a combination of payment sources, which may include Medicare, Medi-Cal, long-term care insurance and other programs designed to help, as well as your own resources. It is essential to consult a professional, such as an elder law attorney, financial planner, or an accountant when planning for long-term care; this person should be well versed in estate planning, public programs like Medi-Cal, and the issues and needs of older persons. These long-term care professionals often work as a team. Always get a second opinion before making any final decision on financial matters. Types of Coverage Medicare Medicare is the federally administered health insurance program for people sixty-five years of age and older, certain disabled people younger than sixty-five years of age, and people with end-stage renal disease. Medicare is divided into four parts, known simply as Part A, Part B, Part C and Part D. The benefits associated with Part A are free and automatic once an individual turns sixty-five. Part B is an add-on that requires a monthly premium. Below are the benefits associated with each plan. Part A — Hospital Insurance
Part B — Medical Insurance
Part C — Medicare Advantage
Part D — Prescription Drug Coverage
Eligibility and Qualifications Medicare is provided when Social Security benefits begin, unless the individual is younger than sixty-five years of age and disabled, or has end-stage renal disease, in which case it is provided at that time. Individuals who are entitled to Part A and enrolled in Part B are eligible to switch to Part C. Medigap Medigap, also known as Medicare Supplemental Insurance, is a health insurance policy sold by private insurance companies that fills the gaps that Medicare fails to cover, such as coinsurance, co-payments and deductibles. There are ten distinct Medigap policies, Medigap Plans A-J. There are also two other Medigap policies, K and L, which only pay a portion. All policies are regulated by the federal and state governments. Plans K and L only provide benefits that supplement those covered under Medicare Parts A and B; both plans require a specific amount of out-of-pocket expenditure before paying the full supplemental benefit for the remainder of the calendar year. Medigap Policies Medigap covers the following, depending on the policy:
Medigap coverage is renewed annually and requires a monthly premium. There are several important considerations when shopping for Medigap. First, a number of insurance companies offer policies with identical benefits, but at different rates. Second, not every company offers all policies. Finally, the policies themselves differ in coverage. Make sure you carefully consider which policy is the best for your needs-if you are married, you and your spouse must purchase separate policies. Eligibility and Qualifications
Managed Care (HMO) Managed care policies were originally designed to provide all the medical services and supplies offered by Medicare plus additional benefits, such as prescription drug, vision, hearing, and enhanced skilled nursing facility coverage. Kaiser Permanente offers a comprehensive program within Northern California. Most policies require individuals to sign over their Medicare benefits and pay a monthly premium in return for full coverage by the HMO's doctors, hospitals and services. Every managed care plan will have a yearly out-of-pocket limit. Once you reach that limit, the HMO is financially responsible for all services, except prescription drug co-payments and durable medical equipment. NOTE: HMO insurance companies only guarantee the policy for a year at a time. Each year, the insurance company decides whether or not to continue offering the policy. If the company opts to discontinue it, they are required to notify the policyholder ninety days before coverage ends and to provide information about purchasing a Medigap policy in his or her area. If you already have a Medigap policy, you probably don't need to purchase a Managed Care policy. Eligibility and Qualifications Coverage is available to:
Coverage not available to:
Medi-Cal: California's Medicaid Program Medi-Cal is California's Medicaid program, a federally aided, state-operated and county-administered program that provides medical benefits for certain low-income individuals with few resources. Medi-Cal, which is not tied to Social Security benefits, provides 100% coverage of most medical expenses and does not require payment of premiums or deductibles in most cases. In addition, health care providers who accept Medi-Cal cannot bill for any additional charges (as they can under Medicare). Medi-Cal no longer covers prescription drugs for people with Medicare. Instead, drug coverage is through Medicare's new Part D prescription drug benefit. Eligibility and Qualifications Qualifying for Medi-Cal is a difficult process. It is best to consult an elder law attorney before attempting to qualify, especially if you have recently or plan to transfer assets to your spouse or heirs. In California alone, there are nearly a hundred different programs, each with its own eligibility requirements. Medi-Cal has several programs that aim to ensure very specific populations have access to health insurance. The Medi-Cal Program for Aged and Disabled Persons covers the majority of low-income seniors. To qualify for The Medi-Cal Program for Aged and Disabled Persons:
Further Requirements *Countable Monthly Income is determined by gross income, which has a sum deducted from it depending on various criteria. The number of household members who are not applying for the program earn large deductions (For 2007, an individual qualified for a $600 deduction, two persons qualified for a $750 deduction and three persons qualified for a $934 deduction) A major deduction includes all payments for health insurance premiums; slight deductions occur for both earned and unearned income. **Countable Assets are defined as:
Exempt Assets are defined as:
If you are not eligible because your monthly income exceeds the current limitations, your application will be considered under the Medically Needy for the Aged, Blind and Disabled Program. You may have to enroll in a Medi-Cal With a Share of Cost program (SOC). Individuals requiring long-term care can qualify through a specialized SOC program, known as the Medically Needy program. Medi-Cal With a Share of Cost programs function as a deductible. Each month medical costs are incurred, the individual must pay a share of the costs, known as Maintenance Needs Levels, which are determined by Medi-Cal. Income and asset levels for Medi-Cal eligibility are subject to change. Check with your local Medi-Cal office for current levels. The San Francisco office can be reached at (415) 863-9892. In-home Supportive Services (IHSS) IHSS is a program for low-income, elderly, and disabled individuals. It is designed to help pay for services that will allow these individuals to remain at home, or maintain employment safely. The services provided include personal and paramedical assistance. Eligibility and Qualifications To be considered for IHSS, a caseworker must administer a needs assessment. The needs assessment determines the level of need for services and the amount of personal assistance IHSS will provide to meet those needs. The needs assessment measures an individual's ability to function independently, both mentally and physically. Further Requirements An individual must meet Social Security's medical eligibility rules for disability:
To apply for IHSS, complete an application and submit it to your local IHSS office at the county welfare department. Contact the San Francisco Social Services Department at (415) 557-5251 for more information. PACE (Program of All-inclusive Care for the Elderly) Programs & San Francisco's On Lok SeniorHealth One variation on Managed Care plans that acts as a Medicaid alternative is the nationwide PACE program. The San Francisco-based On Lok SeniorHealth program, which provides housing, long-term care, and programming for the area's senior population, led to the development of the larger PACE program. The program aims to keep seniors who would normally require placement in a skilled nursing facility a chance to stay in the wider community by providing a breadth of interdisciplinary services. By utilizing adult day health care programs, PACE integrates social and medical services. Enrollees of PACE programs have their care overseen by a multidisciplinary team, which can include doctors, nurses, social workers, nutritionists, and occupational and speech therapists, as well as health and transportation workers. On Lok SeniorHealth has no premium, co-payment or deductible for Medicare or Medi-Cal beneficiaries. Fixed monthly fees are available for Medicare-only beneficiaries, and for Medi-Cal beneficiaries qualifying under the Medically Needy category. However as you can only enroll in one Medicare health plan, enrolling in On Lok SeniorHealth will automatically dis-enroll you from your current Medicare HMO. Coverage PACE enrollees receive all health services through PACE, including doctors' services, hospitalization, therapies, pharmaceuticals and equipment.
Eligibility and Qualifications On Lok SeniorHealth coverage is available to San Francisco residents who are:
Long-term Care Insurance (LTCI) Private insurance companies sell LTCI policies to offset the costs of long-term care. LTCI, like all insurance policies, requires premiums to help recipients avoid paying large sums later on in the event of an illness or a catastrophic event. Premiums are based on the individual's age at the time of purchase and are usually locked in for the life of the policy. LTCI covers the following, depending on the policy you choose:
Buying a LTCI policy allows the policyholder to choose from many options, such as the amount of the daily benefit, the number of years the policy will pay benefits, and, after the applicant qualifies for a policy, the number of days or months before the policy will begin paying benefits. It's very important to evaluate policies carefully to see which one offers the benefits you require with a premium that fits your budget. Policies differ in their benefits, contract conditions, deductibles and premiums. It is also important to take into account the rising cost of health care. Be sure the LTCI policy provides inflation protection for benefits to increase as health care costs continue to rise. Policies in California are labeled according to the place in which benefits are paid. Homecare-only policies pay for care at home and in an adult day care or adult day health care facilities. Make sure the policy includes both types of day care. Facility-only policies pay for care in a skilled nursing facility and in an assisted living facility. Comprehensive policies pay for care in a skilled nursing facility, assisted living facility, adult day care or adult day health care facility, and at home.Since LTCI claims are often paid many years after the purchase of the policy, it is imperative to check the following:
Contact the California State Department of Insurance for information on specific private insurance companies at (916) 492-3500. Eligibility and Qualifications
Veterans Benefits The Department of Veterans Affairs (VA) provides a Medical Benefits Package that provides hospital and outpatient medical care and treatment. VA's priority system ensures that veterans with service-connected disabilities and those below the low-income threshold are granted first priority for receiving care. There is no monthly premium required for VA care. However, depending on the veteran's situation, co-payments may be required. The Uniform Benefits Package available to all enrolled veterans includes:
While many veterans qualify for free health care services based on a compensable service-connected condition or other qualifying factor, most are required to complete an annual financial assessment to determine if they qualify for free services. Veterans whose household income and net worth exceed the established threshold must agree to co-payments to become eligible for VA health care services. The financial assessment determines the enrollment priority group and the co-payments, if any, that must be paid. Call VA Health Care at (877) 222-VETS or visit the VA Web site for more information. Eligibility and Qualifications
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