Most people think that Medicaid is for other people, in particular, for poor people. Medicaid is the primary payer for long-term care, whether at home or in the nursing home. Will you need Medicaid for long-term care?
72% of us will need long-term care; 48% of us will spend time in a nursing home. Pretending that “it will never happen to me” is just that – pretending.
It will happen to me – and to you.
Long-term care costs
In Texas home health care runs about $21/hour; an assisted living facility $4,500/month plus add-ons; a skilled nursing facility, $6,000/month for a shared room. You may well need some combination of these for years.
Medicare won’t pay for it.
The average cost of long-term care is $825,000.
Government benefits are becoming less generous and harder to get. Medicaid, which has never paid for everything, is likely to pay much less in years to come.
Long-term care insurance policies
We may buy a long-term care insurance policy, hopefully one which pays an adequate amount, with an inflation rider, for home health care, an assisted living facility or a nursing home. Some of these policies are with insurance companies which are highly rated for their claims paying ability as well as their general financial strength and will continue to be able to pay 20 or 30 years hence. Some people get these policies through the Texas Long-Term Care Partnership Program, preserving assets if the benefits are exhausted and they need to apply for Medicaid. Some of these are life insurance policies with a long-term care rider: money not paid out for long-term care can go to pay a life insurance benefit. Some postpone the need for Medicaid or buy time to sell illiquid assets such as real property by securing a “short term” long-term care policy with no waiting period which pays for up to one year.
Will you need Medicaid to pay for long-term care? It may be up to you.
Elder law attorney, Terry Garrett, is a member of the National Academy of Elder Law Attorneys and is active in the Texas and Austin Bar Associations. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.