Basically eldercare may be paid for using private monetized resources, private insurance plans and government plans such as Medicare, Medicaid (called by different names in different states) and Veterans benefits. As with the care itself, it is possible to supplement one type of payment with others.
Just as important as it is to do initial research, it is a good idea to keep up with the changing aspects of a parent’s care as well as new options for paying for it. Often, new sources of payment and reimbursement arise as an elder’s health care requirements change. For instance, Medicare Supplemental Insurance will “kick in” when someone who has been receiving memory care support additionally requires short-term skilled nursing care. Similarly an elder who lives in a Continuing Care Retirement Community (CCRC) will have the benefit of Medicare in the event skilled nursing is required.
Paying for Independent Living
Independent Living is most often paid for with private funds. While some Independent Living communities require an entrance fee and may or may not involve condominium ownership, some communities are rental and require only a small fee upon entrance and monthly fees. Some supplemental health services may be paid for with long-term care insurance while the elder lives in Independent Living, if the policy allows. Supplemental private insurance, also known as Managed Care or Medicare Supplemental Insurance, will not pay for Independent Living.
Paying for Assisted Living
Assisted Living is generally paid for from private funds or with a mixture of private funds and long-term care insurance, which will pay for certain services depending upon the policy. Supplemental private insurance will not pay for Assisted Living.
Paying for Memory Care
Private funds supplemented by long-term care insurance policies is the most common way to pay for Memory Care, but Veterans’ Benefits pays for certain aspects of Memory Care, and Medicare, private supplemental insurance and may pay for the short-term skilled nursing and rehab care that may be required at times.
Paying for Nursing Care
Reimbursement for Nursing Care community patients and residents depends largely on length of stay. Different funding sources become viable at different intervals. Short-term rehabilitation stays are often covered by Medicare and/or private insurance, including long-term care insurance. (Certain criteria in terms of length of hospital stay and care requirements while in the Nursing Care community have to be met to receive Medicare payments and it is worthwhile to discuss these with a discharge coordinator at the hospital.) For long-term care residents, private funds, Medicaid, and long-term care insurance are the typical methods of payment.
Paying for a CCRC
CCRCs generally require an entrance fee, which can be refundable to an individual or estate. Residents also pay a monthly service fee, based both on the services utilized and the nature of the contract they may have signed when entering the CCRC. CCRCs can be paid for from private funds or with a mixture of private funds and long-term care insurance, depending on the level of care. Most CCRCs have a short-term rehab program that is Medicare certified.
What is Medigap?
A Medigap policy is health insurance that fills the gaps left in Original Medicare Plan coverage for eldercare. The plans, sometimes called Medicare Supplemental Insurance, are sold by private companies but regulated by the federal government and must conform to one of several standardized Medigap policy types. The Original Medicare Plan and the supplemental plans are designed to dovetail, each paying for a portion of the covered health care costs.
Depending upon which state an elder lives in, he or she may choose from up to 12 policies, and each plan, designated A – L, has a different set of basic and extra benefits. Generally, elders must have Medicare Part A and Part B to begin with and then supplement with the additional coverage. Although the specific benefits of any provider’s Medigap Plan A through L will be the same, costs can vary, and, additionally, not all companies providing this coverage sell all available policies. It pays to shop around.
Spouses are not covered by each other’s policies.