Trusted Care Part 7: How to Pay for Long-Term Care - KTEN.com - No One Gets You Closer

Trusted Care Part 7: How to Pay for Long-Term Care

Updated: Nov 26, 2007 11:11 PM CST
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    Many people don't think about how they'll take care of themselves or a loved one in old age until they're almost there. Unfortunately, the costs of caring for an elderly loved one can be overwhelming. And many people believe after years of paying into the system, they'll automatically receive help. Not true. KTEN's Jocelyn Lockwood explains what it takes to pay for long-term care.

   "The rich have not that worry, the poor have Medicaid, but the between person, often times they plan as best they can, but they're still not totally prepared."   

   Today, Alyne Jones talks about her past.  

  "I had a catastrophic illness during the 70s," Jones said. "I had cancer, which is very expensive.  So, of course, that put what savings we had into a real cramp."

    And she can see her future.

  "I've had to start planning for that in an educated way in order to provide my husband, and the possibility of myself because I'm older than my husband, so the possibility that I may too have to have that type of help."   

  It's predicted 60 percent of those over 65 will need some type of long-term care in their life, and with the cost of nursing home care in Texas and Oklahoma hovering near $50,000 a year, the cost can be an eye opener.   

  "The cost of nursing homes is rising yes, and it's an expensive process," said Michelle Pierce, Former Managing Ombudsman.

  According to the AARP, the national average cost of a semi-private room is $5,556 a month and for a private room it climbs to over $6,000. So how do you pay without depleting your life savings?   

  Most Americans and their families pay in one of three ways: pay privately from savings, use Medicare on a short-term basis or qualify for Medicaid assistance.   

  Let's start with private pay. Many families pay directly from their own pockets. For all, but those with the deepest pockets, it can exhaust a lifetime of savings. To off set it, a growing number of people purchase long-term care insurance. This can be costly, requires medical qualification and has limitations.   

  Another limited option, Medicare, is the basic health care assistance program for Americans 65 and older who are eligible for social security. However, be warned: Medicare does not generally pay for long-term care, rather it assists with short-term needs. After an initial hospitalization and the first 20 days of skilled nursing care, Medicare will partially pay for nursing care up to 100 additional days, but that's usually it.   

  Finally there is Medicaid, a program that provides assistance to low-income residents. It was created as a safety net for low-income individuals but has since become one of the primary methods millions of Americans use to pay for nursing care. In fact, 40% of those in nursing homes are Medicaid recipients. Qualifying, though, isn't easy. You must be a U.S. citizen or resident alien, a resident in the state you're applying, blind or disabled and meet strict income guidelines.   

  In Oklahoma and Texas an individual may receive no more than $1,869 a month in payments, like pensions, social security, investment income or insurance proceeds. A married couple can receive no more than $2,541. That's not all, to qualify you can only have a limited amount of financial resources available. In Oklahoma and Texas your financial resources cannot be worth more than $3,000 a couple or $2,000 an individual. Some financial resources can be excluded, though, like your house and your car among.

  All of this can be confusing, but there are people to help.

  Some have tried to qualify for Medicaid by spending down family assets by transferring or gifting those assets to family. To try and stop that congress passed legislation that created a look back window allowing officials to review applicants financial actions for the previous five years to determine if they took steps to protect or hide assets to qualify.   

  Medicaid officials can even seek reimbursement for the cost of care by levying against a recipients estate when they die, even possibly taking a portion of proceeds gained from the sale of a family's house.   

  For these reasons, you should get professional advice in planning for long-term care.   

  But in Alyne's case, "Everything is already in order as far as I'm concerned because I think we should not leave that up to our children. We have loving relationships with our children, we do not want to put stresses on them."   

  Now, what's left for her is enjoying retirement.  

  "That takes the decision making off them, and personally it gives me peace of mind knowing that our children do not have to make those difficult decisions because they're going to be in sorrow for us, grieving for us, why have the added burden of what are we going to do."  

   Jocelyn Lockwood, KTEN News.