Part 7: How Can LTCC's Be Paid For?
While LTCC's are not cheap, they may still be less expensive than living at home when all things are considered. The options for paying for a LTCC include:
- Private Pay - your income and liquidized assets (annuities, IRA’s, etc.), help from family members and veterans benefits (see below).
- Long Term Care Insurance (LTCI) - if you purchased LTCI, it can be used for certain in-home care and LTCC costs. There are monthly and lifetime caps on payment - you will need to consult your policy to get the specific details. There are also services available that will review your policy and negotiate with the insurance company to make sure you are getting any and all benefits that you are entitled to.
- Medicaid - While most states (44 + D.C.) allow Medicaid to pay for your LTCC costs through what is called the Medicaid Waiver Program (which comes with many different names), there are income and asset limits. You must apply and qualify for Medicaid.
- Veteran’s Aid & Attendance (VA&A) - qualifying as a Veteran or Surviving Spouse can add quite a bit to your income but there are specific asset, income and service requirements to qualify, including:
- 90 days active duty
- 1 day during a wartime period. These are:
- WW II - 12/7/41 thru 12/31/46
- Korea - 6/27/50 thru 1/31/55
- Vietnam - 2/28/61 thru 8/4/64 (must have served physically in Vietnam)
- Vietnam - 8/5/64 thru 5/7/75
- Gulf War - 8/2/90 thru current (requires 24 months service)
- Other than the earlier Vietnam period, you need not have served directly in a theater of operations to qualify.
There are also the asset and income limitations. On the income side, whatever you use on help with things like ADLs is deducted and not counted. That means is you have $5000 a month in income and move into a community that costs $5000 a month, in the eyes of the VA, your income is $0 and that qualifies. Or let's say you're living at home with that same income but you are receiving 4 hours a day of home care (aides) to help you with ADLs. At $25/hour, that's $100/day = $3000/mo. That $3000 gets deducted from your $5000 income, leaving you at $2000/mo and qualifying for most if not all of the maximum benefit.
It is strongly recommended that you work with an accredited VA claims agent through this process.
If you do qualify, the benefits for 2020 can be as high as:
- Married veteran - $2,266/mo
- Single veteran - $1,911/mo
- Spouse needs care, living veteran does not - $1,500/mo
- Surviving spouse (must be married at time of veterans death) - $1,228
Unlike Medicaid, which is paid directly to the service or product provider, VA&A is paid to you (like Social Security) so it really falls under the private pay category for LTCC's since the money passes through you.
Qualifying for Medicaid or VA benefits (you can't get both) is a complex process that requires the guidance of an expert lest you make a mistake that costs you dearly and cannot be corrected. There are "look back" periods for assets (in case you thought giving stuff away would help - it won't) and certain assets like investments and bank accounts are counted while others like your house and car are not. Some assets that are counted for Medicaid are not counted for the VA and vice versa. If you sell your house thinking you'll need that money, you've just converted an asset that is not counted into one that is counted and set back your date of qualifying by months or probably years. This has been said in other articles but here more than anywhere it bears repeating:
Whether for Medicaid or VA benefits, work with an expert to make sure this is done properly.
I hope this series of articles has been helpful in educating you about the LTCC world. As the baby boom generation begins to pass the 80 yo mark, that tsunami of people will begin crashing on the LTCC world in a big way. New communities are being built and new pricing models are being developed and tried. More and more dementia units are being built as cases of Alzheimer's and other forms of dementia continue to explode. Being educated on the current state of affairs in at least a general sense can help you plan and be prepared for whatever it is that you may face.