Long-term care, be it in nursing home, assisted living facility or continuing care facility, is expensive. The average annual rate for a private nursing home room is about $90,520 (according to the 2012 MetLife survey of long-term care costs).
Many family caregivers and their elderly parents think these costs will be taken care of by Medicaid, the joint federal and state program for impoverished people. In fact, regarding Medicaid and long-term care, the public assistance program does pay for the largest share of long-term care services, but only if you meet financial and functional criteria. And it varies considerably from one state to another.
To help caregivers navigate the expensive world of long-term care, here are some highlights of what is – and what is not – covered by public assistance, provided by The National Clearinghouse for Long-Term Care Information.
Medicaid and long-term care
Regarding Medicaid and long-term care, in some case Medicaid will cover the costs, but there are restrictions on the qualifications for assistance. First and foremost, Medicaid is a program designed to help those who are impoverished. In order to qualify for long-term care assistance through Medicaid, your elderly parent must spend practically all of his or her own assets before Medicaid will begin to pick up the tab. If the senior has reasonable income and assets, most likely they will be paying for care on their own.
Sometimes you must spend down (or use up) your personal assets before you qualify for Medicaid. However, get more detailed information from your State Medical Assistance office or an attorney before spending down your resources.
Medicaid pays for long-term care services in both institutional settings (like assisted living and nursing homes) as well as in the home. To qualify for Medicaid, you need to meet three categories of requirements:
- General Medicaid eligibility requirements
- Functional requirements
- Financial requirements
General criteria for Medicaid and long-term care
In order to qualify for Medicaid, recipients must:
- Be age 65 or older or permanently disabled or blind; and
- Meet U.S. citizenship or immigration rules; and
- Be a resident of the state where they apply.
Functional criteria for Medicaid and long-term care
To receive long-term care services under Medicaid, the person who is applying for Medicaid must be assessed and determined to be in need of long-term care. A medical specialist in the state evaluates your parent's care needs. As part of this assessment, the specialist determines if the elderly person needs nursing home care, assisted living or if they are a candidate for home care and community-based services.
The need for long-term care is generally determined by whether the individual can perform the Activities of Daily Living on their own, or whether they need assistance from another person. These activities include bathing, dressing, using the toilet, transferring (to or from bed or chair), caring for incontinence, and eating. If your elderly parent does not meet Medicaid's Functional Eligibility Criteria, they cannot receive long-term care services under Medicaid regardless of how poor they are.
Financial criteria for Medicaid and long-term care
Income. States will assess both your available income and your available assets in determining whether you qualify for the Medicaid program. Some of your income is considered countable income, while other income may not be counted.
Assets. Some assets are included in Medicaid's requirements, while other assets are excluded. While Medicaid's assessment of your income is relatively straightforward, the assessment of your assets is fairly complex. Exempt assets include a primary residence; personal belongings; one motor vehicle; property essential to self support; life insurance with a face value under $1,500; certain burial arrangements; and assets held in specific kinds of trusts. Unless specifically excluded, any other real or personal property that you and your spouse own is counted in the Medicaid eligibility determination.
If you or your loved one need assistance with applying for Medicaid to pay for long-term care, contact your State Medical Assistance office or your state's Area Agency on Aging.