Still looking for the right long term care payment option for you? ALTCP can help you find the perfect coverage by giving you a side-by-side comparison of quotes from top insurers when you shop for quotes now. No commitment, it’s your call!
One question that Americans are itching to know is whether Medicaid pays for long term care. This curiosity is stemmed heavily from the fact that 7 out of 10 of Americans 65 and above will require some form of long term care and the exorbitant cost of long term care.
For example, the average annual fee for a private room in a nursing home is $100,379 according to ALTCP long term care cost by state. Below you can find the median annual cost of the rest of long term care facilities.
Americans expect the government to pay for their long term care needs through programs like Medicare and Medicaid. The former covers nursing home but only for limited time and circumstances. The latter on the other hand covers myriad of long term care facilities and services of people 65 and up as long as they are eligible for benefits.
Medicaid has become the default payment option for long term care. In fact, around 62% of over half long term care and nursing home spending are done through Medicaid. By the year 2023, Medicaid spending on long term care services and supports will increase by 5.5% annually on average and would reach about $100 billion.
So, how does Medicaid pay for long term care?
Ways To Receive Long Term Care Benefits from Medicaid
1. You can qualify for Medicaid if your income is $2000 or below
Medicaid provides coverage for financially challenged Americans. But you don’t need to be broke in order to qualify. An applicant usually can no longer have income higher than $2000 in assets. However, the income limit varies depending on the state where you live in. Also, take note that there are assets that aren’t included in this limit according to Medicaid’s asset rules.
2. Spend down your assets by transferring them to your spouse or children
Since Medicaid imposes a limit on your assets in order to qualify, you can consider transferring money to your spouse or children to become eligible. But if you transfer your assets within five years you’re applying for Medicaid, you will be penalized and will be ineligible for benefits for a certain period of time. However, you can transfer around $120,000 to your spouse if he or she will not apply for Medicaid and can still live independently. You can use this asset transfer rules by Medicaid before transferring your assets to your spouse or children.
3. You need to present a functional eligibility document
In order to receive long term care benefit, a medical professional must certify that you can no longer perform two of six activities of daily living on your own – eating, bathing, toileting, dressing, transferring and incontinence.
In case you qualify, Medicaid can also pay for personal care, help cleaning the house, doing the laundry and home renovations. However, Medicaid will not pay for your food, rent, utilities, and mortgage.
To help you determine what Medicaid pays for, here’s a list of benefits that can serve as your guide.
Medicaid Benefits
1. Nursing home
Medicaid usually pays for nursing home and you can receive benefits right away starting from day one since it has no elimination period. Unfortunately, not all nursing homes accept patients paying through Medicaid. If it does, it might not pay for a private room or allow you to have your spouse as your roommate. In some facilities, they have a special wing or floor just for Medicaid patients.
Related: 6 Ways to Protect your Assets from Nursing Home Costs
2. In-Home Care
In-home care is the popular choice when receiving long term care. But just because it’s what you prefer also means it’s right for you especially if you’re relying on Medicaid. Be careful when receiving care at home and your spouse stays at home since your heirs may be forced to reimburse in-home care costs from the sale of your home when the spouse who received care at home dies.
Read Next: How to Save On In Home Care Costs Without Compromising Quality of Care
3. Adult Day Care
There are instances wherein family members can’t provide care to their loved ones because they need to go to work. Adult day care will come in handy when it comes to this situation. They can just drop off their loved ones in the morning and pick them up after work. Unfortunately, Medicaid doesn’t cover this in most states.
4. Assisted living facilities
Some individuals prefer to retain some of their independence while receiving care, which is possible in assisted living facilities. These facilities are like apartments that offer as much assistance as you need such as doing household chores, meal preparation and more. However, Medicaid doesn’t pay for assisted living in most states.
The Bottom Line
Medicaid definitely pays for long term care. But, you need to spend down your assets first in order to become eligible for benefits and coverage is limited for some long term care supports and services.
It pays to think long and hard to find out if Medicaid can provide you with enough long term care coverage in the future. Also, be open to other payment options such as long-term care insurance so you can compare benefits and you will not just be limited to Medicaid.