A new poll says a growing number of Americans age 40 and older think Medicare should cover the costs of long-term care despite the fact the government has made it clear that Medicare does not pay for these services. The poll, conducted by the Associated Press-NORC Center for Public Affairs Research, seems to show a growing concern about the financial costs and burdens of long-term care.
Health insurance, including Medicare and Medicare Supplements (health insurance for those age 65+), will not pay for any long-term custodial care, which is the type of care most people will end up requiring. Custodial care is help with activities of daily living or supervision due to memory impairment. Generally, health insurance and Medicare will pay for skilled long-term care services for a short period of time and only if the person is improving. Medicaid will pay for this type of care but only if you have little or no assets.
The poll indicated that 56% of respondents think the federal government should devote a great deal or a lot of effort to helping people with the costs of long-term care, and another 30 percent think it should make a moderate effort to do so. According to the poll, 56 percent of Americans age 40 and over think Medicare should have a major role in paying for ongoing living assistance, up from 39 percent who said so in 2013. Majorities of both Democrats and Republicans now think Medicare should bear a large part of the burden.
Many Americans have misconceptions of what health insurance or Medicare will pay when it comes to long-term care. Two-thirds of people age 40+ indicate they have done little or nothing to prepare for the costs associated with aging and extended care. This is despite the fact the US Department of Health and Human Services says if you reach the age of 65 you will have a 70% chance of needing some type of long-term care service before you pass-away.
While the poll suggests the government should be more involved with long-term care but both federal and state governments are highly involved already. Many people are unaware of the federal/state long-term care partnership program. Most states have authorized special certified Long-Term Care Insurance policies which provide additional asset protection to help people plan for the financial costs and burdens of aging.
The Health Care Reform being promoted by the Trump Administration and Republicans in Congress would expand Health Savings Accounts. HSAs could become central to people's financial lives with account holders using them to fund health and long-term care insurance as well as deductibles. The federal government also provides tax deductions to qualified individuals for long-term care insurance premiums as do some states. This is in addition to the long-term care partnership plans which provide additional asset protection for those with qualified long-term care insurance.
People who have LTC insurance policies are receiving benefits from those plans. Long-Term Care Insurance companies paid $8.65 Billion in claim benefits in 2016 according to the American Association for Long-Term Care Insurance (AALTCI) a national consumer education and advocacy group.
“A majority of Americans perceive that Medicare covers long-term care needs but it doesn’t,” Says Jesse Slome, executive director of the AALTCI.
“Americans are living longer and often the result is a need for long-term care. The individuals who own LTC insurance policies benefit from the protection as do their families and loved ones.”
He says insurers have paid out about $100 Billion in claims to individuals receiving care in their own home, in assisted living communities and, of course, in skilled nursing facilities. Without insurance to pay the cost, Slome acknowledges the caregiving responsibility often falls on elderly spouses or adult children of aging parents.
“LTC insurance provides choice and control, while protecting your retirement plans and lifestyle. It allows loved ones to care about you rather than being forced to care for you,” Slome adds.
The US government’s own Medicare website, www.medicare.gov, simply says that Medicare is not the answer, “Medicare doesn't cover long-term care (also called custodial care), if that's the only care you need. Most nursing home care is custodial care”.
“Medicare was designed for SHORT-TERM acute care, and short-term rehabilitative stays in a rehab or long-term care facility. Medicare was never designed to pay for
long-term care,” said Valerie VanBooven, RN BSN in her book, “Aging Answers” (available online at: www.arn-us.com)
The government is the primary payer of long-term care services today. Although Medicare pays very little, but Medicaid is the biggest payer of long-term care services in the United States.
“Too many people fail to plan for aging as they do for retirement. Taxpayers are not in a position to pay for everyone's long-term care. With advances in medical science, more people are living longer and more people require extended care either at home or in a facility,” said Matt McCann, a leading national expert in long-term care planning.
Without an advance plan, the family becomes the default caregiver. Valerie VanBooven, who is also Editor-In-Chief Of www.HomeCareDaily.com, says women comprise 80% of the care provided for a loved one.
The financial costs and burdens of aging have become a tremendous burden on the American family. In 2005 President Bush signed the Deficit Reduction Act. One of the thing it did was the establishment of the federal/state partnership program which allowed states to establish special LTC insurance policies which provide additional asset protection.
This dollar-for-dollar asset protection, or asset disregard, allows consumers to safeguard part of their estate based on the value of benefits paid by their LTC Insurance policy and still access Medicaid. The intention is not to put more people on Medicaid but reward people who plan in advance so they have the peace-of-mind knowing if they do exhaust LTC benefits they will not be forced to spend-down all their assets.
Most states require a spend-down of a vast majority of assets to qualify for Medicaid long-term care benefits. This gives incentive for people to buy affordable long-term care insurance, before they retire, as part of their retirement planning.
Many experts have been suggesting consumers plan with long-term care insurance for years instead of using their own money and perhaps ending up on Medicaid.
“I have said over and over again that as you enter your late 40's to 50's you should look into buying long-term care insurance.,” said well-known author, TV host and financial planner Suzi Orman.
Dave Ramsey, radio financial planning host, also suggests consumers add long-term care insurance to their retirement plan.
“I advise virtually everyone to have good, long-term care coverage in place by age 60. For many folks, it can make the difference between living with dignity and having to depend on the government. And that’s not something I ever want to do for anything—especially not my healthcare,” Ramsey said.
If more people planned for long-term care in advance there would be less pressure on the federal and state governments and their budgets. The partnership program is designed to encourage people to plan and back up their plan in the event they exhaust their LTC insurance benefits.
Experts say in most cases people will not exhaust their LTC insurance and thus can preserve their savings and never get to a position of receiving Medicaid benefits.
The poll says just 25 percent would favor requiring individuals to purchase long-term care insurance, perhaps echoing opposition to the individual mandate to buy insurance that has long been the least popular part of the 2010 health care law. However, experts suggest if people do so on their own as part of their future retirement plans they could have enough money to pay for care and in addition ease the burden that is placed on family.
About the Author
An LTC News author focusing on long-term care and aging.
Contributor since August 21st, 2017