Elder Care Money Management
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How to Pay for Elder Care Services
Long term personal budgeting: We all hope that our parents will live long lives, so when creating long term savings goals decide how much you can save for the long-term needs of your parents.
If possible sit down with your parents and discuss potential costs above and beyond what their expected income and public assistance will be. Some may need assistance with not only making meals, but purchasing food for meals. Other daily needs that your loved one may need financial assistance with are their phone, cable, heating, etc. Having a plan and some savings before a crisis arises not only will prevent financial stress, but also help control emotional stress.
Employee Assistance/Work Life Companies: Many companies have third party benefits companies called Employee Assistance Programs (EAP). They offer counseling and referrals for work life situations. This confidential service is typically offered free through your Human Resources Department. An EAP can help guide you through the emotional and financial confusion of understanding Elder Care and the associated finances.
Community Resources: When the basics of living become difficult to afford, remember that communities have resources for those in need. Research food pantries in the community and find out if there is door-to-door public transportation to assist your elder in getting to appointments. Call the local Council on Aging for a list of community resources available, both to help with finances and personal safety.
Medicare: Publicly funded health insurance available to U.S. citizens or legal residents of 5 years or more. Medicare consists of Hospital Insurance, Medical Insurance, the Medicare Advantage Plan, and the Prescription Drug plan. Of note is that Medicare only pays for nursing homes in medically specific circumstances. The elder must be in the hospital for three consecutive days (not including the day of discharge) and the full cost is covered for up to 20 days. A daily nursing home co-pay of $128 (as of 2011) is required for stays between 21-100 days, but this amount of time is not automatically guaranteed. For more details about Medicare visit www.cms.gov (Centers for Medicare & Medicaid Services).
Medigap: Private supplemental health insurance that covers medical expenses not covered by Medicare. To guarantee eligibility without medical screening a person must enroll within 6 months of turning 65 or enrolling in Medicare Part B. Otherwise an individual will complete a medical screening as part of the insurance application. Not all individuals will need Medigap insurance, but explore the option before making a decision.
Medicaid: Provides health insurance to people with low income (means and asset tests are applicable in most states). Medicaid policies not only pay for medical services and prescriptions, but pay nursing home costs at nursing homes registered with the Medicaid program. Potential future eligibility for Medicaid should be part of the conversation you have with your loved ones about long-term care and financial concerns.
Long-term care insurance (LTCI): LTCI provides a daily or monthly monetary care benefit when the individual becomes eligible based on that company’s benefit indicator. Depending on the policy, funds can be used for various services, from in home custodial care to therapies not covered by Medicare and beyond. Premiums are lower the earlier a person signs up for LTCI, and premiums usually are paid for up to 20 years to fully fund the policy. Before purchasing LTCI be sure to compare the long-term cost of the premiums versus the expected benefits your loved one will receive from the policy. For more information visit www.longtermcare.gov.