Many people mistakenly believe government programs, like Medicare and Medicaid, will provide all the long-term care services they need. Unfortunately, this may not be the case. Failing to plan how you’ll pay for long-term care services may place you at serious financial risk.
Medicare generally does not pay for long-term care services. Instead, it’s designed to help get you back on your feet following an illness or injury.
- Medicare pays only for “skilled care” you receive in a nursing home, but only if it’s medically necessary and only for a limited period of time
- Medicare does not pay for “custodial care” services many people receive in their homes – services like assistance with dressing, bathing and using the bathroom. Medicare also does not pay for care received in an assisted living facility
Medicaid provides long-term care assistance to individuals who have exhausted their personal resources.
- Medicaid pays for both “skilled care” and “custodial care” received in a nursing home, but only after you spend down your assets to meet eligibility guidelines in your state
- In some states, Medicaid may pay for some services received at home or in an assisted living facility
What is a long-term care partnership program?
It’s a partnership between your state government and private insurance companies. Insurance companies voluntarily agree to participate by offering long-term care insurance policies that meet specified criteria. The state agrees to provide Medicaid asset protection to people who purchase partnership-qualified policies.
How does Medicaid asset protection work?