Home Care | Senior Placement
Paying for Senior Care
Private Pay / Using Personal Funds
- Personal savings
- Social security benefits / Social Security Disability Income (SSDI) benefits
- Retirement funds / Pension funds
- Stock and bonds
- Long-term care insurance
- Reverse mortgages / Home equity lines of credit
- Life insurance policies
- Annuities / Trusts
- Investments / Other sources of personal funds
Long Term Care Insurance
Long-term care (LTC) insurance covers services that may not be covered under a regular health insurance plan. This includes coverage for services such as Activities of Daily Living (ADL) which includes but are not limited to: personal hygiene and grooming, medication reminders, meal planning and preparation, light housekeeping, exercises, socialization, transportation, companionship, etc.
Long-term insurance will reimburse policy holders a daily amount (long-term care policies have a maximum payout amount that would limit both daily and lifetime payouts, the amount varies depending on the plan chosen) for assistance with Activities Of Daily Living (ADL). Policies must be purchased in advance of needing care. To establish coverage, the insurance company will determine the policy holder’s eligibility for long-term care through a health assessment done by a registered nurse or social worker. Subsequently, a plan of care must be submitted and approved by a care manager.
Most policies will reimburse the policy holder for care received including but are not limited to:
- An assisted living facility
- A nursing home
- Your home
Medicaid / Medicaid Waivers
Medicaid waivers is a federal and state managed program, sometimes referred to as Home and Community Based Services (HCBS) Waivers, 1915(b) Managed Care Waivers, 1115 Demonstration Waivers, etc. Eligibility for Medicaid waivers are based on income and on the extent of the individual’s needs for help.
Medicaid rules are state-specific. Therefore, eligibility, coverage and benefits differ in every state. Medicaid waivers may cover a portion the services below:
- Long-term care in a nursing home
- Skilled home health care services in a senior’s private home
- Short-term respite in a nursing home
- Assisted living facility
- Home-based community services for seniors
Traditional Medicare
Medicare generally does not cover non-medical supportive services or senior living, which includes companion care services and personal care assistance. While Medicare does not cover personal care services including assistance with Activities of Daily Living (ADL) if that is the patient’s only need, it will cover these services if they are delivered in conjunction with skilled nursing or therapy services from a Medicare-certified provider. Medicare will cover services such as:
- Short-term rehabilitation in a skilled nursing and rehab center. Medicare will pay for a portion of the first 100 days of rehab. The first 20 days are covered in full with certain conditions; a co-pay is then required for days 21-100.
- Skilled home health care services from a Medicare-certified agency. These services are most often used following a hospital stay for an illness, injury or surgery. Skilled nursing care, physical therapy, speech therapy or occupational therapy services are delivered in the privacy of the senior’s home, whether that’s their private residence or their residence in an independent living or assisted living community. But it’s important to understand that, while Medicare will pay for home health services in an assisted living residence, it doesn’t pay for the costs of room and board. Furthermore, these benefits are limited, not open-ended.
Veterans Administration Aid and Attendance Benefit (A&A)
The Aid and Attendance is a financial benefit available to veterans who qualify for the regular Veterans Affairs (VA) pension and require assistance with Activities Daily Living (ADL). To qualify for Aid and Attendance, veterans should be receiving a VA pension and meet all of the associated eligibility requirements, plus meet at least one of four separate eligibility requirements. This benefit is intended for veterans that are over the age of 65 and disabled. Qualifications for Veteran’s Benefits:
- Wartime Services (WWII, Korean War, Vietnam War, Gulf War).
- Benefit for Veterans or Surviving Spouses.
- Must have served 90 days active duty with one day during wartime.
- Must have honorable discharge.
- Restrictions on income & assets.
- Must have a medical condition that warrants care.
Reverse Mortgages & HELOCs
Homeowners have the option of using Reverse mortgages and Home Equity Lines Of Credit (HELOC) to help pay for long-term care services. Reverse mortgage is a type of loan that converts partially the value of one’s home to cash. Unlike a traditional home loan, no repayment is required until the borrower sells the home, no longer uses it as a main residence, or dies. There are certain limitations when utilizing a reverse mortgage, for example, the homeowner must continue to live in the home as reverse mortgage rules state that a home must be owner-occupied. Home Equity Lines Of Credits (HELOC) do not have this limitation.
Life Insurance Benefits and Conversions
There are five different ways that life insurance policies can be used to pay for long-term care while the policyholder is still alive.
- Life settlements are an option in which a policyholder sells their right to collect the death benefit from their policy and they stop making monthly premium payments in exchange for an immediate lump sum of cash.
- Viatical settlements are similar to life settlements but are designed for terminally ill individuals. Typically, viatical settlements fetch a higher buyout for the policy than a life settlement.
- Accelerated death benefits are an option that enables terminally ill individuals to receive a portion of their death benefits in advance of their death.
- Death benefits loans are loans taken against the cash value of the policy, not the death benefit. These must be re-paid or the death benefit will be reduced.
- Life insurance conversions directly convert the value of a policy in exchange for care. For example, an individual with a $100,000 policy may exchange that for several years in an assisted living or senior living community. Of these five options, it is likely life insurance policyholders will receive the greatest value for their policy using this approach.
Medicare Advantage
Medicare Advantage (MA), may cover the cost of non-medical supportive services such as non-medical home care services, adult day care facilities, transportation, etc. As of 2019, MA plans may provide “daily maintenance” benefits for those who reside in an in-home setting, given services are medically appropriate for the individual in question and are suggested by a licensed provider.
Program of All-Inclusive Care for the Elderly (PACE)
Program of All-Inclusive Care for the Elderly (PACE), a Medicare program that covers medical care services, personal care services, rehabilitation services, medications, social services, and other long-term care costs for the elderly. PACE can cover a portion or all of the long-term care needs of a person. In addition, PACE allow most people who qualify to continue living at home instead of moving to a long-term care facility. PACE is available only in certain States and/or locations within those States. Upon enrollment, a monthly charge may apply.
State Health Insurance Assistance Program (SHIP)
State Health Insurance Assistance Program (SHIP) is a national program offered in each State that provides counseling and assistance to people and their families on Medicare, Medicaid, and Medicare supplemental insurance.
Social Security Disability Income (SSDI)
Social Security benefits for people younger than age 65 who are disabled according to the Social Security Administration’s definition. For eligibility, conditions apply:
- Inability to work
- Disability may last at least a year
- Disability may result in death
Using Annuities to Pay for Long-Term Care
An annuity contract with an insurance company may help pay for long-term care services. In exchange for a single payment or a series of payments, the insurance company will send you an annuity, which is a series of regular payments over a specified period of time. There are two types of annuities: immediate annuities and deferred long-term care annuities.
Trusts
A trust is a legal entity that allows a person to transfer assets to another person, called the trustee. Once the trust is established, the trustee manages and controls the assets for the person or another beneficiary. You may choose to use a trust to provide flexible control of assets for an older adult or a person with a disability, which could include yourself or your spouse. Two types of trusts can help pay for long-term care services: charitable remainder trusts and Medicaid disability trusts.