Long-term care services include personal care services like bathing, doing household chores, and other activities, to help you stay independent in your community. Long-term care also includes community services, such as meals, adult day care, and transportation services. Residential facilities, such as assisted living facilities and nursing homes, also provide long-term care services along with housing.
Depending on how much you need, these types of services can be expensive. Medicare and other health insurance do not include most long-term care services, so planning for how you might pay for long-term care becomes important. If you have fairly low income and savings, you may qualify for Medicaid, the federal public program that pays for most long-term care services. Other federal public programs, such as the Older Americans Act, and state-funded programs, pay for long-term care services, but, like Medicaid, these programs cover services for people with high levels of disability and low income and savings.
With 70 percent of us needing long-term care services at some point during our lives after turning age 65, and the limited coverage of public programs, there is a good chance you will have to pay for some or all of the services out of your personal income and savings. Even if you only need a little assistance at home with personal care, paying for long-term care out of your personal income and savings can be difficult. For example, you would pay more than $19,000 on average for a home health aide to assist three times a week, in 2010.
Costs of Care
Long-term care includes a range of health and support services that you may need as you age or if you have a disability. Most of these services are personal care services, such as bathing and dressing. Family members may be able to provide some or all of these services at no charge. But if your care and support needs increase, you may need paid care in addition to the services that your family members provide, or to give them respite. In addition, if your needs increase to the point where you need services in a facility like a nursing home or assisted living, you may need to plan how to pay for these services.
The cost of long-term care depends on the type and amount of care you need, the provider you use, and where you live. Here are a few examples:
The average costs for long-term care in the United States (in 2010) are:
Who Pays for Long Term Care?
Consumer surveys reveal common misunderstandings about which public programs pay for long-term care services. Many people believe they can rely on Medicare to pay for their long-term care services. However, Medicare only pays for long-term care if you require skilled services or rehabilitative care for a short period of time. Medicare does not pay for non-skilled assistance with Activities of Daily Living, which makes up the majority of long-term care services. You will have to pay for long-term care services that are not covered by a public or private insurance program.
Medicaid is a joint federal and state program that pays for the largest share of long-term care services. However, Medicaid only covers you if your income is below a certain level and you meet minimum state eligibility requirements. Such requirements are based on the amount of assistance you need with Activities of Daily Living. Other federal programs such as the Older Americans Act and the Department of Veterans Affairs pay for long-term care services, but only for specific populations and in certain circumstances.
Most employer-sponsored or private health insurance, including health insurance plans, covers only the same kinds of limited services as Medicare. If they do cover long-term care, it is typically only for skilled, short-term, medically necessary care.
There is an increasing number of private payment options that can help you pay for long-term care services. These include long-term care insurance, reverse mortgages, life insurance options, and annuities.
It is important that you understand the differences among the public programs and private financing options for long-term care services. Each public program and each private financing source has its own rules for the services it covers, and its own eligibility requirements, copayments, and premiums.
If you have enough income and savings, you will likely need to pay for long-term care services on your own, from your income, savings, and possibly from the equity in your home. You can also purchase long-term care insurance to cover your personal care needs.
Three main government programs might help you pay for services if you meet their rules, though these programs cover limited numbers of people.
Medicaid may pay for your care if you qualify based on your level of need or disability (also called “functional eligibility”) and have limited savings, or if you use up your savings paying for long-term care services yourself.
The Older Americans Act may also help you to pay for some long-term care services.
If you are a Veteran, the U.S. Department of Veterans Affairs may provide some long-term care services.
In addition, some states offer their own programs to cover some long-term care services.
You may use a variety of payment sources, some from public programs and others from private insurance, or from your own income and savings as your care needs and financial circumstances change.
Many people think Medicare or their regular health care insurance from their employer that covers hospital stays and doctor visits will pay for long-term care. Health care insurance and Medicare may pay for your care if you need skilled care or care for a short time to recover from an illness or injury. They do not cover ongoing personal care needs, like help with bathing and dressing.
From the U.S. Department of Health and Human Services National Clearinghouse for Long-Term Care Information website.