Long term care services are very expensive and are continually increasing due to inflation.  The financial impact of these expenses can be devastating. 

Neither health nor long term disability insurance is designed to cover help for Activities of Daily Living (ADLs) such as bathing, dressing, eating, etc. 

 

Home Health Care:  Costs vary widely depending on the type and frequency of care received, but can be more expensive than nursing home care!  Around-the-clock home health care is often so expensive that it is unavailable to all but the very wealthy.  As of 2004, the estimated average hourly rate for Home Health Aides was $18 per hour.

The MetLife Market Survey of Nursing Home and Home Care Costs, Mature Market Institute, September 2004

 

Assisted Living Care:  Cost averages $25,000 per year and can exceed $55,000 per year in some parts of the country.  Consumer's Guide to Long Term Care Insurance, P. Crawford, 2003

 

Nursing Home Care:  The average daily rate for a private Room in a nursing home is $192 or $70,080 annually.  The average daily rate for a semiprivate room is $169 or $61,685 annually.

 

COMPARISON:  NURSING HOME COSTS 2004

Area	Semi-Private Average	Private Average
Indianapolis, IN	$125	$160
Ft. Wayne, IN	$139	$170
Louisville, KY	$149	$180

 The MetLife Market Survey of Nursing Home and Home Care Costs,

Mature Market Institute, September 2004

 

 

Who Pays for Long Term Care?

 

What about Medicare?

Medicare's role is often misunderstood.  It is designed to pay for "medically necessary" care, such as hospital and physician charges.  It is not designed to pay for long term care assistance with activities for daily living (ADLs).

 

Medicare is basically a "come in, fix it, and leave system" for short term illnesses.  It doesn't work well for long term conditions that cannot be medically treated and can only be administered in a SKILLED CARE Facility.

 

Services	Medicare Pays
Hospitalization.  Semiprivate room and board, general nursing and miscellaneous services and supplies
First 60 Days	All but $912
61st thru 90th Day	All but $228/day
91st Day and After: While using 60 lifetime reserve days	All but $456/day
Once lifetime reserve days are used: Additional 365 days Beyond the additional 365 days	$0 $0 $0
Skilled Nursing Facility.  You must meet Medicare's requirements, including having been in a hospital for at least 3 days and entered a Medicare approved facility within 30 days after leaving the hospital
First 20 Days	All approved amounts
21st through 100th Day	All but $114/day
101st Day and After	$0

 

Medicare allows some assistance for home health care, but there are significant restrictions and the guidelines are continually evolving due to budgetary restraints.

Medicare does NOT pay for care in an adult day care center or assisted living facility, both preferred types of  long term care.

 

What about Medicaid?

Unlike Medicare and Social Security, Medicaid is a welfare program for the impoverished.  Qualifications vary state to state, but usually it is impossible for middle or upper income groups to receive Medicaid assistance without "spending down" their resources to the qualifying level.

 

Disadvantages of Medicaid: It can be difficult to find a facility that accepts Medicaid patients. Loss of independence and privacy.  Medicaid determines where you may be cared for and all personal banking and financial records must be disclosed. Loss of choice.  In many states, Medicaid provides only limited (if any) coverage for home health care or assisted living care.

 

What about traditional health insurance and HMO's?

These are similar to Medicare in that they are designed to pay for "medically necessary" care such as hospital and doctor bills.  They generally do NOT pay for long term assistance with ADLs.

 

What about the VA system?

Because of a limited budget and limited legislative authority, the Department of Veteran's Affairs cannot pay for all the long term care needs of our veterans.  According to a 1996 General Accounting Office Report, the VA only paid for the LTC services of 15% of veterans needing care (34,000 of 235,000)

Certification in Long Term Care, Course Handbook, Harley Gordon, referencing "VA Health Care: Better Data Needed to Effectively Use Limited Nursing Home Resources," General Accounting Office, HRD-97-27.

 

The VA generally does not pay for care in assisted living facilities.  Veterans may be eligible for home health care and nursing home care.  The benefits are regulated, and those with service-related disabilities or low incomes are considered first.  If the resources and facilities are available, veterans with higher incomes who were not disabled in the service may be eligible based on a means-test.

Consumer's Guide to Long Term Care Insurance, P. Crawford, 2003