Many people believe that Medicare will pay their bills for nursing home care, if needed. Not true! Medicare will only pay in certain limited situations (rehabilitation after surgery) and then for a very limited time period (often 100 days). Medicaid will step in and pay but only if you qualify – which means you have few, if any, assets.
The alternative is to purchase long term care insurance. The problem with long term care insurance is that unless you purchase life-time coverage you run the risk of running out of coverage if you live too long in a nursing home. Life-time is very, very expensive! Too expensive for many to afford.
A federal law enacted last year is intended to help solve this problem. The Partnership for Long Term Care, a public-private long term insurance program is now operating in 5 states (California, Connecticut, Idaho, Indiana, and New York) and is soon expected in 25 other states. Under this program, you first purchase a private long term care insurance policy that has received your state’ approval. If those benefits run out, you can then apply for Medicaid to help cover any additional costs. For example, if you bought a policy with $100,000 in benefits, then used them up, you could keep $100,000 in personal assets and still qualify for Medicaid coverage. Without a partnership policy, your state Medicaid department could require you to spend down your assets before you are qualified.
These web sites can help you determine the costs of long-term care in your area:
Notaburden.com (click on “cost by state” calculator)