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Insurance: Long Term Nightmare

Aug 17, 2007
Recent legislation in Congress may make it even more difficult for seniors to qualify for government-paid long-term care coverage. If you don't take action now, you may be setting you and your family up for a Long Term Nightmare!

This problem is so potentially damaging, yet so little understood, I've decided to dedicate multiple articles to covering it. In this article, I'll expose the problem.

Seniors know the potential cost of long-term care could devastate them financially. The thought of seeing the nest egg they've worked years to build evaporate to pay for their care is hard to take. Some seniors seek to find ways to manipulate the system so that they can qualify for government assistance. Others mistakenly believe that Medicare and
Medicaid will pay for their care.

The reason that many feel the government should cover this cost is because Medicare and Medicaid are designed to provide health insurance to those over 65 (MediCARE) or to those who are impoverished (MedicAID). Since the need for care is usually the result of failing health, why shouldn't it, they reason.

The terms 'long-term care' and 'skilled-nursing care' refer to different needs. Understanding the difference is critical to understanding the problems you and your family may face. Knowing the difference will prevent a false sense of security.

'Long-term care' is a generalized term that refers to the assisted care individuals may require in their homes, an assisted-living facility or a nursing home. 'Skilled-nursing care' is a specific term used when that assistance must be provided by a licensed or registered nurse.

'Long-term care' includes the need for both custodial care and skilled-nursing care. 'Skilled-nursing care' does NOT include the need for custodial care. That's the issue that creates the Long Term Nightmare.

For instance, if someone needs assistance because they can't bathe, cook or dress themselves, they need custodial care. If someone has dementia and needs to be supervised, that is referred to as custodial care. If someone needs intravenous fluids (IV), they need skilled-nursing care because it cannot be administered by anyone else. Custodial care can be done by a family member. Skilled-nursing care is provided by licensed nurses.

The assistance provided by Medicare to those over 65 is only for skilled-nursing care. Typically this care occurs in a nursing home while the patient recovers from a surgery or illness that required at least a 3-day hospital stay. If the hospital stay didn't occur, Medicare won't pay for it. Even then, Medicare will only cover roughly 100 days.

Medicare does NOT provide any coverage when the assistance needed is custodial. Those costs must be paid entirely by the individual and/or their family. Medicare will not pay for stays in an assisted-living facility.

For the impoverished who qualify, Medicaid will cover nursing home costs. But the number of Medicaid beds is limited and recipients may face long waiting periods to get into such a facility.

Sometimes Medicaid will cover assisted living facilities and home health care, which includes custodial care. But these benefits are harder to receive reimbursement for. Rules and benefits vary from state to state. The bottom line for those depending on Medicaid is that you will be left with few options and limited care.

The greatest need for long-term care as we age is often custodial in nature. At some point, we are all likely to need help with our medications, cooking and cleaning. Worse, we may be suffering from the chronic effects of a long term illness. Even though we may not be able to care for ourselves as a result, Medicare will not pay for any help unless it requires a skilled nurse. They will, however, cover hospice care for terminally ill patients.

Many families find themselves caught in the nightmare of having to provide the care that isn't covered by insurance or the government. This problem will not go away--the government is likely to cover even less care in the future.
About the Author
Nationally-syndicated financial columnist and Certified Financial Planner Jeffrey Voudrie provides personal, in-depth money management services and advice to select private clients throughout the USA. He will answer your financial question FREE at http://www.guardingyourwealth.net/
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