As senior citizens are living longer lives, the cost to care for them is overtaxing many family budgets. Once seniors are unable to live on their own, family members often choose assisted living facilities for them. As families look for methods to pay for expensive care, they often wonder does Medicare pay for assisted living care?
The short answer is no. Medicare is a health insurance program for senior American citizens who are 65 or older. It pays for health care and hospital services like inpatient and outpatient care, as well as short-term rehab, lab tests, and doctor visits. But, it does not pay for any form of long-term care, like assisted living.
Instead of relying on Medicare for long-term care, seniors and their families should turn to other options. Fortunately, there are other options for covering the monthly costs of $2000 and up for assisted living care. Paying for assisted living can be challenging, especially if families are trying to qualify for different programs.
What to Expect from Medicaid?
Medicaid pays for long-term care through federal and state funding. To receive Medicaid, seniors must qualify for the program. Most of the eligibility requirements focus on financial information and residency status. In most cases, you have to have no savings or investments or assets to receive Medicaid benefits.
Before Medicaid awards any benefits, it will look five years into an applicant’s financial past. It is nearly impossible to hide assets and people who attempt to do so receive penalties that can prevent them from receiving Medicaid benefits for many years.
Before receiving Medicaid benefits, you have to allocate assets to assisted living care. If the senior who needs attention is considered low-income, then the cost of care should exceed the senior's income. The senior has to be a permanent resident or have US citizenship, and the senior has to live in a state where benefits are paid.
Many seniors turn to Medicaid to pay for assisted living care, as it is a health insurance product, but covers more than most health insurance programs. There is a program called PACE, which stands for Program of All-Inclusive Care for the Elderly). PACE offers a one-stop shop for seniors who need long-term care.
Since states have guidelines for Medicaid coverage, families should speak with their local Medicaid office, and it doesn’t hurt to have a lawyer help with completing a Medicaid application. Knowing the answer to does Medicare pay for assisted living means that you have to look for alternatives for elderly care.
Other Insurance Options
If financial situations prevent your loved one from using Medicaid, you can rest assured that there are other options available before you have to dig into investments and savings. Long-term care insurance and life insurance are other tools that can be used to pay for assisted living.
Using Long-Term Insurance
If your elderly loved one has long-term care insurance, it should cover some of the assisted living facility costs. Even if your loved one has this type of coverage, you should expect that the insurance company will fight having to pay for care. You might need an attorney or a representative from the assisted living facility to help you get insurance to cover the monthly fee.
It is commonplace for insurance companies to ask why care is needed, and they usually require at least two areas of daily need. You might need to prove that your elderly loved one needs help with activities like bathing, dressing, transportation, walking, eating, and more. Some elderly adults can stay at home with useful assistive tools like toilet safety frames.
Life Insurance Payouts
The other insurance covers assisted living costs is life insurance, which can be confusing for people who only know life insurance as paying after the policyholder dies. Life insurance can be cashed out for a percentage of its value, and that money can be used to pay for assisted living care.
However, not all life insurance policies will allow early withdrawal. You should speak with your agent about the plan and the rules regarding living benefits. Remember, when you cash out a life insurance policy, survivors will not be able to access the plan after the owner passes.
If you do have issues cashing out the policy, you might have other options. Some third-party companies will buy plans so owners can cash them in, but the business will take some of the proceeds. Some life insurance policies can be converted into long-term care policies.
Options for Homeowners
If your elderly loved ones still own their home, it can be used to pay for assisted living care. It can be challenging to use the family home for care like this, but using the house could be the only option.
If the loved one is still in the home, a reverse mortgage will do double duty. The reverse mortgage allows homeowners to borrow on equity. Lenders do not require regular monthly payments if at least one owner is still living in the home, but if both parties move out, then the mortgage needs to be repaid.
Reverse mortgages can be helpful if the family is planning on eventually selling the home. However, families planning to keep the home are burdened by the payments after the elderly residents no longer live there.
Consider all of your options before choosing a reverse mortgage. Families have had problems with them, especially when plans change.
Bridge loans are short-term loans that people often use when they are between homes. People who are building a new home, but still living in their older home use bridge loans. Now, bridge loans can be used to pay for assisted living moves, too.
Bridge loans allow people to move into assisted living as they wait for funding from another source, like a pension or proceeds from a home sale. The standard amount for a bridge loan is $50,000.
Renting or Selling
If other options are not possible, then it might be time to rent or sell the home. Renting is a popular option because it keeps the house in the family, and it creates a steady stream of income. But, if you need a substantial infusion of money, selling the home is the best choice.
It is best to consider options before selling the home. A sale is final while renting does give families time to make decisions. However, once tenants move in, it can be challenging to get them to move. Selling a home can be stressful. The market, the condition of the house, and sentimental value make it challenging to get a reasonable sale price.
If Your Loved One Is a Veteran
Another possible option for elderly loved ones is the Veteran’s Administration (VA). Veterans are often able to have their benefits pay for assisted living care, and the process is easy if your loved one was injured while serving the country.
However, there are other options available for elderly veterans who were not injured while in service. Like Medicaid, the benefits are based on income and medical conditions. The benefits are also based on how long the veteran served and whether any of the service time was during wartime.
If your loved one qualifies for benefits, they are usually not enough to pay for all assisted living expenses. Applicants need to submit military discharge papers and a medical diagnosis to prove that assisted living care is needed. Financial information is also required. Customer service representatives through the VA can help with the application process.
Paying on Your Own
Some people do not have any benefits or insurance to use to pay for assisted living care services. They cover the monthly fee with their income, investments, or savings. Some people cash in their 401K plans. Unfortunately, Medicaid and other benefits cannot be accessed until assets are exhausted.
If you do decide to pay for assisted living care on your own, it is wise to shop around for the best price you can find. Of course, not all assisted living care centers are the same, so be sure to investigate the facilities before you make your final decision. If you are paying on your own, you might be able to negotiate a lower rate.
Some older people will invest in an annuity. With health care the way it is, people outlive their finances. With an annuity, you pay for the savings and then take payments for a set period. Annuities let people lengthen their finances, so they last throughout their lifetimes. The risk is on the investment company, not on you.
Medicaid does not consider an annuity to be a full asset, so it can be helpful to have if you do need to apply for government aid. If you do have annuities, it is in your best interest to work with an accountant or a lawyer who understands the Medicaid application process.
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