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Paying for Senior Care: Government Resources and Aid

Last Updated: April 2, 2013

The cost of senior care can stretch family budgets to the breaking point, but financial help is available. Medicare, Medicaid and the Department of Veteran Affairs offer assistance programs that can help pay for eldercare in certain circumstances.

Medicare

Medicare is national health insurance that all Americans receive when they turn 65. Disabled people who are under 65 can also enroll in Medicare without paying premiums. Medicare is usually not helpful to those looking for a solution to long term care needs.

Medicare Covers Only Short-Term Care

Medicare can cover short-term rehab stays at a nursing home, for example, after a hospitalization. It can also pay for rehab and therapy at home for a limited period of time and when prescribed by a doctor.

But it's vitally important to recognize that Medicare does not pay for custodial care. Medicare should primarily be considered health insurance. This means Medicare does not pay for the following types of senior care:

• Assisted living
• Long term care at a nursing home
• Residential care homes
• Any long term care

For more information about Medicare, see http://www.medicare.gov.

Medicaid

Medicaid is the foremost government assistance program paying for long term care for people who can't afford it on their own. It is administered cooperatively by the federal government and states. While the majority of its funding comes from the federal government, each state has some discretion in its individual rules, regulations and eligibility requirements.

Eligibility for Medicaid

• A senior has to put almost all of his or her existing assets towards care.
• Low income, or at least have medical or care expenses that are higher than income.
• If a married couple wants to qualify for Medicaid, the couple does not need to have exhausted all financial resources. The healthy spouse can usually keep the home he or she lives in, but may still have to make significant sacrifices.

Medicaid is the Social Safety Net for Ailing Elders

Medicaid is the safety net for Americans who need care that they cannot afford privately. Like Medicare, Medicaid acts as health insurance. But unlike Medicare, Medicaid can be used to pay for long term nursing home care in all states. Many states also allow their residents to use Medicaid to pay for assisted living communities or other alternatives to nursing homes such as in-home care.

Some states even offer a program through Medicaid called PACE (Program of All Inclusive Care for the Elderly), which covers all of the senior's care and medical needs through one contracting agency, with the goal of allowing people who have traditionally gone to nursing homes to stay in the community (at home) with support.

State Medicare and Medicaid Guidelines

Each state has its own guidelines, so you will need to contact a State Medical Assistance office for more details:

• Call 1-800-MEDICARE: www.medicare.gov
• Visit the Medicare and Medicaid Services website www.cms.hhs.gov

You may also want to speak with an elder planner or elder attorney who can help guide you through the nuances of a successful Medicaid application.

Veteran Aid

Veterans who are at least 65 years-old and who served during war time (though not necessarily in actual combat) may be eligible for financial assistance through the Department of Veteran Affairs (VA) that can be used to help pay for care. Spouses, surviving spouses, and even other dependents of the veteran may be eligible for assistance in some cases as well.

There are three levels of VA benefits for wartime veterans and their dependents, which are based on the needs of the applicant.

• Basic Pension:Basic Pension is designed to function as cash assistance for low income veterans and their dependents. Applicants may be healthy.
• Housebound Benefit:Housebound assistance with day-to-day activities must be needed on a regular basis.
• Aid and Attendance:Assistance must be required on a "daily basis."

Assistance from the VA is "means tested," in other words, only people who are deemed genuinely in need will receive an award. It also means that the amount of the benefit is based on the applicant's income, assets, and needs. Applicants whose countable incomes are over maximum thresholds, or who have more than $80,000 in assets (excluding the home they live in and the care they drive), will usually be denied. But in situations that are borderline, it can't hurt to apply, as decisions are largely made on a case by case basis.

How to Apply

Like Medicaid, VA benefits can be extraordinarily complex. For this reason you might also consider speaking with a Veteran Services Officer. Veteran Services Officers volunteer through the United States, frequently at hubs for veterans like American Legion halls Veteran of Foreign Wars (VFW) lodges.

To apply for VA health care or determine eligibility,

• Call (877) 222-VETS: Health Benefits Service Center
• Contact your local Veterans Benefits Office or Medical Facility
• Visit the Department of Veterans Affairs website www1.va.gov/directory/guide/home.asp

Non-Government Options for Financing Senior Care

Medicaid, veteran aid, and to some extent, Medicare, are the government originating programs that help pay for care for older people in the United States. But there are alternatives. Some families also explore little known tools such as reverse mortgages and life settlements to raise funds to pay for necessary care.

  Our Senior Living Advisors are happy to discuss, at no cost, the financial aspect of care planning. They can talk you through the options, and even suggest local experts who can help if you wish to pursue any of the financial aid options outlined in this article. Talk to a Senior Living Advisor in your area today!

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