Who Pays for Long Term Care? A Hodgepodge

Who takes care of elders who live to the point where they are not independent, and who pays for that care? The answer is a hodgepodge.

For those of you who have more than $250,000 give or take, a house and substantial income, you should consider buying long term care insurance. It generally makes sense to buy-in sooner rather than later. It affords you the independence and assurance that you will not be beholden to government programs that might dictate where you live and what level of care you have. Make sure that you consider getting good at-home coverage. That increases the likelihood that you can age in place rather than have to relocate to a more supervised setting such as a rest home, assisted living or nursing home.

Only recently has our government started a trend towards funding more community-based care. The belief that it is less expensive to provide a personal care attendant to aunt Martha in her home than to fund her care in a supervised setting such as rest home or nursing home. There are a multitude of community-based programs under Masshealth aka Medicaid. Most are needs-based. They are far too confusing to be able to detail in this column. They can help in certain circumstances. The Aid and Attendance program for veterans is often a help. These programs are generally not geared to elders who need substantial supervision or care.

If an elder is unable to remain in the community by using his or her savings or income to pay for care (and perhaps even with a community-based program) but is not ready for a nursing home, one option is a rest home. There are fewer of them nowadays; Rockridge out by the state police barracks and Lathrop Home on South Street are the two principal ones in the Northampton area. The cost is upwards of $3,500 per month. These facilities participate in a Massachusetts funding program known as EAEDC. The program only subsidizes your housing if you have $250 in assets and have insufficient income to pay the private rate.

Although many rest homes have shuttered their doors, assisted living facilities have proliferated; Linda Manor, Rockridge, Armsbrook, Arbors Amherst and Loomis House. These facilities generally are private pay only. Some have rare state government funded beds under the GAFC program. How do people pay the cost of $4,000 or more per month? Their savings, the proceeds from the sale of their homes and their monthly pensions.

If the elder’s care needs exceed what a rest home or assisted living can provide, then they need a skilled nursing facility. Such placement/ care costs are upward of $11,000 per month. Medicare (federal health insurance) only pays for short term rehabilitation stays. This is shocking to many elders who have relied almost exclusively on Medicare during their retirement. So, who pays for long term placement? The Commonwealth of Massachusetts. But only if you have less than $2,000 and have not transferred/gifted assets to your children (or anyone else) within the five years prior to seeking coverage. In a spousal case the spouse in the community can retain $119,200 and the home.

As you can see, paying for long term care is a hodgepodge. It is a function of an elder’s finances, needs-based government program, clinical level of functioning and facility participation in government programs. Discussing these issues with family members, a financial planner and an elder law attorney is a good place to start.