Taking Care of Elderly Loved Ones
Helping a Loved One Find Healthcare
Paying for custodial and medical care can be difficult. Medical costs can add up even if your loved one has Medicare with Medicare supplemental insurance or a Medicare Advantage plan. (In addition to the original Medicare "fee-for-service" program, Medicare offers beneficiaries the option to receive care through private insurance plans. These private insurance options are called Medicare Advantage.) Prescription drugs alone can be several thousand dollars a year. Add other costs, such as help around the home, and it all adds up to a large bill.
Medicaid will help pay the medical and long-term care bills if there is no other way to do so. Medicaid is a program run by both the federal government and your state. To qualify for Medicaid, your loved one must exhaust almost all of his or her assets first. If he or she is in a nursing home and on Medicaid, virtually all income has to be used for paying medical and long-term care costs. Once your loved one is accepted into the program, Medicaid will pay for most custodial and medical care.
What Medicaid Will Let Your Loved One Keep:
Special Rules Regarding Medicaid
There are some difficult rules regarding Medicaid that you should understand:
IMPORTANT NOTE: There are ways people try to plan in advance for Medicaid. These strategies require a skilled lawyer who specializes in this area (commonly called elder law). Keep in mind that Congress has changed the Medicaid qualification rules many times to stop these techniques. In some cases, these changes have been retroactive. PROCEED VERY CAREFULLY AND UNDERSTAND THE RISKS INVOLVED!!!
If a loved one is on Medicaid, alert anyone who is planning to give or leave something in a will to him or her. When that person makes a gift or dies, Medicaid will force him or her to spend down the gift or inheritance. If the person writing the will wants to leave something to your loved one, consider having his or her lawyer set up a trust (called a Medicaid Trust). These rules are very complicated, so you or your loved one should talk to an experienced elder law attorney. If you're aware of any life insurance policies or retirement plans that name your loved one as a beneficiary, change the beneficiary to someone else or to one of these special trusts.
More about Medicare
Medicare is a program that every senior should be participating in. There are some points of caution you should know:
Doctor Charges to A Fee-For-Service Medicare Patient—Medicare sets a maximum amount that the doctor can charge Medicare for each type of service provided. The Medicare patient is responsible for paying a deductible each year (the first $183 in 2017) and 20% of the balance of the Medicare-approved amount for each visit. What if the doctor wants to charge more than the maximum amount he or she bills to Medicare? The doctor can charge the patient directly for the surplus. (Medicare sets limits as to how much the doctor can charge you over the Medicare maximum.) With the private fee-for-service plan under Medicare Advantage, the Medicare patient is responsible for the difference between the doctor's full fee (not limited by Medicare) and the amount reimbursed by Medicare, up to Medicare's fee schedule.
Paying for Custodial Care out of Savings
Those who have lots of available money may choose self-funding (also known as self-insurance) to pay for custodial care. They may prefer to use their life savings rather than paying monthly premiums on an insurance policy they may never use. This strategy requires your loved one to have set aside invested financial assets that keep up yearly with the cost of inflation, and can then be used later on to pay for nursing home care.
IMPORTANT NOTE: We only suggest the self-funding strategy if your loved one has the financial resources to afford this care on his or her own without reducing the retirement income that your loved one and spouse will need.
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