Released Nov. 19, 2007
ST. PAUL, Minn.--It’s not true that most long-term care costs are paid by government sources through Medicare and Medicaid.
Most long term care costs are paid for out-of-pocket from the private income and life savings of individuals. In addition, family caregivers provide a majority of the total long-term care needed without any pay and with varying financial consequences.
Medicaid, the largest source of payment for long-term care, pays approximately 46 percent of nursing home costs (when an individual’s resources meet eligibility criteria). Medicare pays very few long-term costs; long-term care policies currently pay for 8 percent of long-term care costs.
Health insurance does not cover long-term care costs. Even Medicare supplement policies are not designed to do so. Examine your existing policy or coverage carefully to know what your plan covers.
Long-term care insurance is not the only financing option, either. Both private and public options can be put together to provide care. These include: self-insuring, home equity, reverse mortgages, and accelerated death benefits, as well as long-term care insurance. Medical Assistance is a safety net for individuals meeting low income and asset eligibility criteria.
Children can not be held liable for their parent’s long-term care costs. Although 30 states have statues that establish a duty for adult children to care for their indigent elderly parents, federal law does not permit states to use the income or resources of non-spouses in determining the Medicaid eligibility of an adult. States cannot collect reimbursement from non-spouses.
For more information, visit the University of Minnesota Extension website, http://www.financinglongtermcare.umn.edu or contact Rosemary Heins, a family resource management educator with University of Minnesota Extension at heins002@umn.edu.
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http://www.extension.umn.edu/extensionnews/2007/longtermcosts.html
Contacts: Julie Christensen, (612) 626-4077 or reuve007@umn.edu
