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Understanding Eldercare Payer Sources

 

Americans are eligible for Medicare the month they turn 65.  Many have a false impression of what that entails. While one can sign up for Medicare on the Social Security website www.SocialSecurity.gov or in person at their local Social Security office, that is just the beginning. It is estimated that Medicare pays for about one half of the medical cost seniors will be responsible for.  A large part of the remaining needed coverage comes in the form of “gap” policies or Advantage Plans, both from health insurance companies. If a “gap” policy is chosen a separate prescription plan (called part D) will be needed. An insurance provider can explain the multitude of options available or go to www.Medicare.gov for tutorials. Long Term Care insurance covers the custodial needs of seniors, which is beyond the medical coverage that the Medicare system provides. Options change every year, so plan to repeat.

While we advise a review of the chosen coverage every year during open enrollment that runs from November 1st til December 15th in 2019, many people stick with a previous choice. This short column is not designed to replace advice from an insurance professional but to bring awareness to the complexity. With the exception of the long-term care policies, this system is controlled by a federal department named the Center for Medicare and Medicaid (CMS). The government has trust funds set up to pay medical bills on your behalf for their portion of the costs, so think of Medicare as a key payer source. Their standard “premium” is the same for each person, $135.50 in 2019 and an expected $144.30 in 2020. Advantage plans manage more healthcare, while gap policies follow guidelines for their portion. Medicaid is an assistance program for low-income people that states manage for CMS.

A broader perspective of eldercare should include hearing aids, glasses, medical hardware, Assisted Living or Memory Care. Help around the home such as yardwork or house cleaning can even expand to homecare with an hourly rate, with you as the payer source.  The basis of paying privately for anything that may be needed can be planned in a long term budget. We suggest viewing the complicated government programs as multiple payer sources for that budget. Understanding what each covers will prevent surprises in emergencies. While you can make all your choices when you privately pay as the payer source, involving insurance coverage comes with strings attached, including the government-run programs. Each has established coverages and each has rules that control the extent available. Doctors have little say, especially in hospitals, of what is covered or not. Rules matter in this area.

In an emergency, arriving at a medical facility like a hospital, an admissions person will collect your coverage information. They then input to your chart the “rules” that come from your payer source. How much of your costs are covered are based on the previous choices that have been made for that year. Learn to ask what is covered by your plan when health professionals make recommendations. You will pay privately for the rest. Custodial-care costs that are included with the housing in a medical facility are called in-patient costs.  All other custodial costs are part of your private pay budget. As an example, rehabilitation can take place in the home, Assisted Living, or in a skilled nursing facility as an inpatient. The Payer sources all strive to reduce their cost exposure to inpatient situations with rules indicating when discharge is required. Then, home or Assisted Living custodial costs are yours so only the visit to or by a therapist remains covered. The healthcare professionals can’t change the system for you.

In the multi-trillion dollar industry of homecare, the complexity may seem overwhelming. It is even harder to comprehend during the stress of an emergency. Nursing home long-term care in most states also has the complexity of legal and financial document preparation. Assisted Living is a simpler process with private pay providing more consumer satisfaction since the family is the direct payer source. CarePatrol understands the payer source complications and can help your family through the maze. The acceptability of much of that maze comes from previous decisions and the payer source restrictions. As understanding eldercare payer sources are based on your individual coverage, a regular review and access to the policies is wise. Long Term care policies may need to be purchased before age 65, or as a rider for life insurance. You are not alone, 10,000 Americans turn 65 every day.

About the author
David Wilkins

CSA

CarePatrol of the Villages to the Gulf

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