Many seniors are under the false impression that their Medicare will pay for in home care services when they need it. The truth is that Medicare does not pay for custodial care in the home nor long term care services in nursing homes.
An elderly adult can expect Medicare to kick in to cover some costs, including things like:
- “Part A” Hospital stay (days 1-60 at 100% after deductible)
- Skilled Nursing facility stay (days 1-20 at 100%) following an in-patient qualifying hospitalization
- “Part B” doctor’s visits and outpatient services
- Durable Medical Equipment — with a doctor’s order many items like hospital beds, walkers and wheelchairs will be paid for at 80% (supplemental insurance may pick up the rest)
- In home physical, occupational and speech therapy — as needed based on the patient’s medical condition with a doctor’s order, if the patient meets “home bound” criteria
- Home Health Aides — this is different than custodial care — the service is limited and short term, designed to supplement skilled care. Generally the aide comes for less than 2 hours, 2-3x per week, to provide a bath and hygiene care
- Hospice and Palliative care — for patients who suffer from a debilitating or terminal illness
As you can see, Medicare coverage is intermittent, temporary, and incomplete. Most seniors will need day-to-day assistance in order to age in place successfully (70% according to the US Department of Health and Human Services). At the average monthly social security benefit of $1360.00 per month, the average senior cannot afford to pay out of pocket for it, either.
So how do they pay for it? Long term care insurance is one way. These policies are managed by private insurance companies and the client pays a monthly premium which can vary based on a number of factors (health screening, benefit period, maximum benefits, etc). These policies must be purchased early enough to be cost effective and for the client to be insurable. Ideally, in their mid to late fifties.
If you don’t have long term care insurance, you will have to pay for all custodial care privately through personal savings and IRAS, annuities, and/or trusts. Therefore it is important to plan ahead with the help of a financial advisor and/or estate attorney. It is a good idea to map out a plan that considers your potential needs, preferences and concerns. It is also helpful to include your family in these plans so that they know how to set them into action in the case of your incapacity.
About the Author: Pam Reynolds, CMC is the President and co-owner of Allegiance Aging Care Services. Pam has spent almost fifteen years working in senior care including long term care facilities and home health care. Her higher education is in Social Work, and she has been credentialed as both a certified Geriatric Care Manager and Licensed Assisted Living Administrator. Read more about Pam and her team of Aging Care Professionals here.