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There are government programs that can help if you have a loved one who needs more care than you can provide. Perhaps she needs rehabilitative care after back surgery, or maybe you’re pondering nursing home care. When researching senior care costs, it’s essential to learn about government resources. The four main sources of government health-related aid—Medicare, Medicaid, PACE, and VA benefits—can help cover some of the senior care costs for your loved one, but usually only under very specific circumstances, and the rules can be dauntingly complex. So we’d like to help you better understand the system by providing this handy guide to how the government programs can help qualified persons pay for their housing and care.

Medicare

Medicare is the United States largest insurance program, serving individuals aged 65 or older (as well as some disabled people and anyone suffering from end stage renal disease). It has two sections: Part A is also called Hospital Insurance, and Part B is also known as Doctor’s Insurance. Medicare Part A is free if a person is entitled to Social Security or Railroad Retirement payments. An individual is automatically enrolled at age 65. People who do not qualify must pay a premium of $423 per month in 2008. People aged 65 and older can choose to enroll in Medicare Part B, which is a fee-for-service plan. In 2008, the monthly premium is $96.40. If an individual doesn’t sign up at her first opportunity, enrollment takes place during an annual open-enrollment period. For more information, visit www.medicare.gov.

Part A covers some senior care costs in a Skilled Nursing Facility (SNF) after a qualified three-day hospital stay. Patients must enter a Medicare-certified SNF within 30 days of leaving the hospital, and the patient’s doctor must order the care. At the SNF:

• Medicare pays for the first 20 days of care;
• During days 21 through 100, a patient pays $128 per day and Medicare pays the rest;
• After 100 days, Medicare pays nothing.

Medicare pays for a semiprivate room, meals, skilled nursing and rehabilitative services, and other services and supplies. It does not pay for custodial care, which is defined as care that helps with the activities of daily living, such as dressing, using the bathroom, and eating. All coverage is paid for based on a benefit period, which begins when a patient enters a SNF. The benefit period ends after the patient has not received skilled care in a SNF for 60 days in a row. Once this period ends, a new period begins only after a three-day qualifying hospital stay.

Medicare covers some home health care costs; this is paid for out of both Part A and Part B. Home health care is paid on a prospective payment system for a 60-day episode of care. This episode ends with the close of the first 60 consecutive days in which the patient is not an inpatient in a hospital, SNF, or is not being provided home health services. If an individual is enrolled in both Part A and Part B, this rate includes all costs for six home health disciplines:

1. Skilled nursing services
2. Home health aide services
3. Physical therapy
4. Speech-language pathology services
5. Occupational therapy services
6. Medical social services

If a patient lives in an assisted living facility (or personal care home, residential home, etc.) that does not primarily engage in providing these six services, Medicare will cover necessary home health care costs for this patient. Once again, Medicare does not pay for custodial care. All services must be ordered by a doctor and provided by a Medicare-certified home care agency. Medicare Part A also covers short-term hospital and inpatient respite care when a terminally-ill patient is under hospice care.

Medicaid

Medicaid is health insurance that helps pay for medical and long-term care for people with low incomes and resources. Medicaid is a partnership program between the federal and state governments: While states follow set federal guidelines, each state determines some rules and benefits. To qualify, an individual must meet the income and asset guidelines in his state. “Generally, those limits are linked to the federal poverty level, but only as a benchmark. States will set their limits at, above, or below the federal poverty level,” says Mary M. Kahn, a spokeswoman at the Centers for Medicare and Medicaid Services (CMS). For state guidelines, contact a State Medical Assistance office; find this number at www.medicare.gov or call 1-800-MEDICARE. The CMS website, at www.cms.hhs.gov, also has individual state rules.

It’s a good idea to enlist the advice of the state Medicaid office or an attorney before an individual applies for Medicaid. This is partly due to the penalties that can occur when someone “spends down resources.” Often an individual spends down assets to qualify, but rules must be followed during this process. If a person does not initially meet her state’s Medicaid limits, she may still qualify on a month-to-month basis if her medical expenses bring her income level below her state’s eligibility level.

Federal Medicaid laws mandate that states offer nursing home care as a benefit for any enrollee for whom this care is medically necessary. Generally speaking, Medicaid also pays for the following services:

• In adult day care centers, medical services are covered, but custodial care is not covered.
• Respite care can be covered as part of a waiver.
• Home care is available in states that have approved home- and community-based waivers.
• Medical services are covered in group/residential and personal care homes, but custodial care is not covered here.

PACE

The Program of All-inclusive Care for the Elderly, known as PACE, is an interdisciplinary system that uses Medicare and Medicaid dollars to provide health care. PACE provides the entire continuum of care and services to seniors with chronic care needs, and strives to keep clients living in their homes for as long as possible. To be eligible for PACE, a person must:

• be 55 or older,
• be certified as nursing home eligible in his or her state,
• live in a PACE service area, and
• be able to live safely in the community with the support of PACE services.

If your loved one qualifies for Medicaid, dollars from this program pay for part of the PACE premium and Medicare covers the rest. If he doesn’t qualify for Medicaid, he must pay a monthly premium to cover the Medicaid portion.

Currently there are 35 PACE providers in 21 states; 20 more providers will be added soon. Four Pre-PACE programs operate under Medicaid contracts, using a fee-for service for the Medicare-covered services. To find out if an individual lives in a PACE service area, go to www.npaonline.org.

PACE delivers a comprehensive set of services focused on the health and well-being of the individual. An interdisciplinary team—including doctors, nurses, social works, physical and occupational therapists, and drivers—manages each clients care plan. PACE covers senior care costs at the following:

• Nursing home care when a client can no longer live in the community
  —At any given time, 7 or 8 percent of PACE enrollees are permanently in nursing home care.
• Adult day care at PACE day health centers, with transportation provided
• Respite care
• Home care
• Memory care, usually called dementia and Alzheimer’s care

Housing in assisted living, residential, or personal care homes isn’t usually covered, but PACE often facilitates the situation of a person living in a more supportive housing environment.

VA Benefits

Veterans of the United States Armed Forces may be eligible for long-term care services provided by the Department of Veterans Affairs (VA). Eligibility for most health benefits is based on discharge from active military service under other than dishonorable discharge. However, a surviving spouse of a deceased veteran may also be eligible for benefits. To apply for VA health care or determine eligibility, call the VA’s Health Benefits Service Center at (877) 222-VETS, or contact a Veterans Benefits Office or VA health care facility (find the nearest location at www1.va.gov/directory/guide/home.asp).

The VA offers the following non-institutional care services for veterans:

• An interdisciplinary treatment team provides long-term primary medical care to chronically ill veterans in the Home-based Primary Care program.
• Contract home health care, purchased from private-sector providers at VA medical centers, is also called fee-basis home care.
• Health maintenance and rehabilitative services are offered in Adult Day Health Care programs.
• Veterans who need nursing home care receive community care in the Homemaker and Home Health Aide program.
• Veterans who do not need nursing home care but cannot live independently receive home care in the Community Residential Care Program. The VA only pays for this program’s administration and clinical services.
• Respite care in home and community settings is generally limited to 30 days per year.
• In the Geriatric Evaluation and Management program, an interdisciplinary team provides assessment and treatment to older veterans with multiple health, psychosocial, functional, or geriatric issues.
• Some VA facilities have specialized dementia and Alzheimer’s care programs, with inpatient and outpatient components.

All of these services may require a co-payment.

The VA also provides nursing home care for eligible veterans. There are three types of nursing homes:

1. VA nursing homes usually admit patients that require short-term skilled care, or patients with a service-connected disability.
2. State veterans homes have eligibility rules set by the state that runs each home.
3. Contract nursing homes meet the needs of veterans who may not qualify for care in the previous types of homes, or if a VA or state home isn’t available.

The general rules for nursing home eligibility state that a patient must have a condition that requires inpatient nursing care and be medically stable, and that an appropriate medical provider must assess the patient and confirm the patient needs this care. Social workers at VA medical centers can further explain these qualifications and any co-payment requirements.