Facts, myths, and alternatives to government healthcare programs

Many people believe they can rely on the government for all their long-term healthcare related issues, however this is not a real solution for a high majority of the population. While there are benefits to using government programs, there are a lot of misconceptions as well. “The majority of Americans do not plan in advance to fund long term care (LTC) so the government program Medicaid pays for 40% and Medicare pays for 23%. *” This leaves a significant short-fall the people have to pay out of their savings.  Clearly the government does not cover all the long-term care costs for everyone. Let’s review the facts, myths and alternatives.

“After retirement, Medicare will cover my health costs for life.” — MYTH

This is incorrect- you are not set for life with Medicare coverage, because Medicare simply does not cover everything that you’re going to need down the road. Medicare doesn’t cover prescriptions, blood tests, skilled nursing after the 100th day, alternative medicine, most dental or vision care. It also doesn’t cover non-medical home care services (including assistance activities of daily living). Have a question about a specific item, test or service and whether its covered? Medicare.gov offers a search feature here.

“Medicare will pay for all of my long-term nursing home costs.” — MYTH 

This is not true. Medicare will pay up to 100 days of skilled nursing care. The first 20 days are fully paid, the next 21-100 are partially paid, and after 100 days you are fully responsible for the cost.

Additionally, to qualify for coverage you must have moved into the skilled nursing facility within 30 days after your discharge from a hospital for a related illness or injury. On top of that, your hospital stay must have lasted at least three days.

ALTERNATIVES

Medigap insurance can sometimes make up the difference for the partial Medicare coverage during days 21-100. If you need to remain in a facility after 100 days, you have four options for your ongoing costs:

1. long-term care insurance,
2. Friends Life Care membership with care coordination,
3. Medicaid
4. or your personal funds.

“Medicaid will pay for the rest of my long-term nursing home costs.” — MYTH

Perhaps… but you must go through a review process to assess your assets before you are eligible. Medicaid is designed to pay for long-term care once the individual’s funds and assets are extinguished. Meaning, if you have $100,000 to your name, you are expected to use your resources before turning to a government program like Medicaid.

In order to qualify for Medicaid long-term care, your income and financial resources will be evaluated by your County Assistance Office. Income is evaluated by your gross monthly earnings, and is also a determining factor for the amount you may claim as Medicaid-exempt resources. Assets can include, but are not limited to, cash, stocks and bonds, bank accounts, your IRA, real estate, clothing, jewelry, and household goods. Keep in mind that qualifications are subject to change on an annual basis.

To put it into perspective, for 2017: anyone with a gross monthly income over $2,205 is allowed to keep $2,400 in resources that will not count for Medicaid, and anyone with an income equal to or less than $2,205 can keep $8,000 in non-countable resources.

“I can just re-allocate my assets to my children to qualify for Medicaid coverage.” — MYTH

There is a five-year look-back period as part of the Medicaid enrollment process. All gifts, transfers, and re-allocations made within five years from the date of application for Medicaid benefits are subject to the look-back period. Those gifts will result in a penalty.  It is important that you speak with an elder law attorney who specializes in Medicaid law if you are thinking of distributing your assets to your family or loved ones.

When I apply for Medicaid, the Pennsylvania Department of Public Welfare (DPW) and the nursing home staff will help me through the process.” — FACT, however…

Sometimes, but this is not always in your best interest. Medicaid applications require extensive documentation and it can get time consuming and overwhelming. The nursing home wants to get paid and is acting on behalf of their own interest, so you will need someone who will advocate for you directly. Your best resource for going through this process is an elder law attorney. Need a good reference? See Friends Life Care Partners elder law and estate planning attorney Nego Pile.  You can call him at 610-254-9001 or submit an online inquiry here.

Relying solely on Medicare and Medicaid is a huge risk. — FACT

Do any of these common misconceptions resonate with you? Friends Life Care offers a solution that allows you to transfer that risk into a sound long-term care plan. If you’re already a Friends Life Care Member, you understand the benefits and perks that come along with membership. If you aren’t, let’s review a few membership highlights:

• Peace of mind that you have a financial plan in place for future care needs
• Access to support and resources to help you remain in your home
• Care Coordination through FLC’s network of dedicated and credentialed caregivers, including non-medical home services
• Access to VigR™, an integrated, whole-health model that includes lifestyle assessments, enrichment workshops and more.

 

42% of American workers do not have a retirement strategy**. Make sure you research and understand all your options so you can make an educated decision about how to approach your later years. For more information on federal aid programs and supplemental coverage, reserve your seat to attend our free 11 a.m. November 1^st, VigR™ webinar, “Medicare 101,” or send us an email to request a recording.  Also be sure to check out Friends Life Care’s cost of care comparison here so you can see how Friends Life Care’s plans compare to long-term insurance policies, continuing care retirement communities, and not having a plan at all.

 

 

 

*The Long-Term Care Financing Crisis, The Heritage Foundation

**Transamerica Center for Retirement Studies