Letting the Government Pay for Your Long-Term Care
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Letting the Government Pay for Your Long-Term Care
Whether long-term care (LTC) insurance is suitable for you depends in large part on the options you have in paying for long-term care. Let us examine the two ways besides LTC insurance to pay for long-term care.
Things To Know
- Medicare is not long-term care, and Medicaid is only for those who are impoverished.
Letting the government pay
Medicare—the (almost) universal federal health insurance program for seniors—is not long-term care under any circumstances. Medicaid, on the other hand, is the state-federal welfare program that presently pays for the largest portion of the nursing home care in America. However, Medicaid is a program designed to assist only the impoverished.
In past years, some financial planners and attorneys have taken the position that qualifying for Medicaid is a viable personal financial planning strategy. Clients with little savings or real property have been advised that costly LTC insurance may not be suitable for them. It would be pointless, according to this view, to spend money on premiums when the clients could easily impoverish themselves to become eligible for welfare instead.
The state will check up on you
The law strongly discourages this practice, however. For example, the law provides "lookback" periods over which time the state will check to see whether assets have been transferred by the Medicaid applicant without receiving equal value in return. Assets so transferred are included in calculations used for qualifying Medicaid recipients. Such transfers result in a potentially unlimited period of Medicaid ineligibility determined by the value of the property transferred.
Government budgets are not likely to ever catch up with increasing demand for long-term care services by an aging population. Some argue that a public assistance system under financial strain today will not be able to offer care for any but the neediest among us in 20, 30, or more years.