Long Term Care

“Frequently Asked Questions about Lifelong Planning”

Who Covers the Cost?

Medicaid

Many people believe Medicaid pays for long-term care.  However, Medicaid pays for just 38% of the nation’s total long-term care expenses, and only for individual’s who meet income and asset requirements.  Medicaid is located at The Department of Family and Children Services in Georgia.  You may qualify for Medicaid if you have limited income.  However, you should be aware of some recent changes in the law, including the Medicaid Estate Recovery Act.  In addition, if you have given any of your assets to your children, other family members or charities within the past five years, those assets will still be considered yours when calculating Medicaid eligibility.

Medicare

Medicare covers limited skilled nursing care, but does not cover custodial or personal care, which is the majority of long-term care needs.  Private insurance, such as Medigap/Supplemental Insurance picks up about 14% of the cost, which leaves consumers paying an average of 28% of long-term care costs out-of-pocket. 

“Who Pays for LTC?”

Veteran’s Benefits

The Department of Veteran Affairs (VA) may provide long-term care services and financial assistance to those who qualify. 

Ways to Pay For Long-term Care:

• Long-Term Care Insurance
• Home Equity Options
• Life Insurance Options
• Trusts and Other Options
• Investment Basics & Retirement Benefits

Long-term Care Insurance

Just as you buy insurance to protect against a catastrophic loss related to your home, your health and your car, you can buy insurance to pay for eventual long-term care needs.  "10 Questions to Ask Before You Buy Long-term Care Insurance" (PDF)

You are more likely to be able to afford the premiums and pass the medical exam if you buy in your 50s or 60s.  Typically, if you wait until your 70s or 80s to try to buy a policy, the premiums will be prohibitive, and you may already have a disqualifying medical condition. 
A Shopper's Guide to Long-Term Care Insurance (PDF) 
 
Consider your financial situation.  If you have few assets, you may wish to use your own funds until they run out and then qualify for Medicaid.  If you have significant assets, you may elect to fund any long-term care needs yourself.  If you fall somewhere in the middle, long-term care insurance may be your most attractive option.

Your Home

You may be able to use your home equity to help pay for long-term care costs through a Reverse Mortgage (www.reversemortgage.org)

"Top Ten Things to Know if You’re Interested in a Reverse Mortgage" (PDF)

Just the FAQs” Answers to Common Questions about Reverse Mortgages

Home equity can also be used through the Sale of a Home or a Leaseback.  A leaseback involves selling your home to an investor and arranging to lease it back on a long-term basis.  The investor would own your home when you move. 

Your Life Insurance

One way to help finance long-term care is to sell your life insurance policy.  If you are terminally ill or chronically ill, you may be able to sell your policy to a third party.  You usually have to sell your life insurance for a lower amount of the full face value.  The amount that is paid is usually based on the remaining life expectancy of the insured (you).  The death benefit usually ranges from 50 percent to 80 percent.  When you die, the third party will get the full death benefit.

• Accelerated Death Benefit
• Life Settlement
• Viatical Settlement

Georgia Lifelong Planning Program (www.planearlynow.org) and the National learinghouse for Long Term Care website(www.longtermcare.gov) provide more information about these topics.