How do you pay for long-term care as a retired senior when your monthly income consists of your Social Security check and your savings?
It seems few of us want to think about long-term elder care, hoping that perhaps it will be something we just won’t need. However, the reality is that Americans are living many years past retirement age due to advancements in medical care (a baby born in the U.S.A. today has a life expectancy of 100 years).
How much care does Medicare provide for?
Medicare only covers a nursing home stay for up to 100 days, with a Medical Doctor’s approval for medical need which usually must follow a major medical event, such as a stroke or hip-replacement.
Medicaid is offered for very low-income seniors and is required to provide long-term care in a nursing home. If a senior does not financially qualify for Medicaid, they must pay for their care by using a long-term care insurance policy (if they purchased one) or with private funds.
Medicaid is a benefit which is managed by each state government and usually only pays for care in a nursing home, except in a few innovative states who have developed home care programs for long-term care, in addition to providing nursing home care (Vermont is one state which will provide Medicaid care in the home).
AARP’s Public Policy Institute (American Association of Retired Persons) recently issued a report showing that only 4 states spend more than 50% of their Medicaid long-term care dollars on home and community based services. All the other state governments are still allocating all their dollars for Medicaid care to nursing homes, even though institutionalized care is more costly and surveys show a majority of senior citizens prefer to receive long-term care in their homes.
Only Alaska, Washington, New Mexico and Oregon spend more than 50% of their Medicaid dollars on long-term care through a home or community based program rather than a nursing home.
The AARP report, A Balancing Act: State Long-Term Care Reform, is the first to examine Medicaid spending on long-term care for seniors and adults with physical disabilities, separate from people with mental retardation and developmental disabilities who also use Medicaid long-term care.
Nationally, 75 % of Medicaid spending provides care in a nursing home for seniors and adults with physical disabilities.
However, states have succeeded in decreasing the amount of institutional care for those with mental and developmental disabilities to just 39%.
Perhaps as the Baby Boomers continue to age and vastly increase the amount of dollars needed to provide for care, the government will focus on more care options, beyond just nursing home care, for those seniors qualifying for Medicaid benefits.
