Column: Misunderstood fact of Medicare

Commentary by Bob Adams

I frequently hear folks say, “I have long-term-care coverage through Medicare.” Even my Mom and sisters misunderstood this. They weren’t happy when I told them the facts.  Let me make this perfectly clear – Medicare does not cover long-term care. So what does Medicare cover?

Under Medicare Part A (the part that covers hospitalization) Medicare covers Skilled Nursing Care (SNC) for up to 100 consecutive days. What’s the difference? SNC is about maintenance, or helping you get better, while long-term care (LTC) is about custodial care, providing you care if you are unable to fully care for yourself.

What triggers SNC? You must first be admitted to a hospital for at least three days. Caution, an important word here is “admitted.”  If you’re in the hospital for “observation,” you do not qualify for Medicare-covered SNC.  So what does Medicare pay for in SNC? Your first 20 days in SNC are paid by Medicare. You’ll have a co-payment of $161 per day for the next 80 days of your recovery. Beyond 100 days, Medicare pays nothing. Benefits can be renewed after you’ve been out of the SNC facility for 60 consecutive days.

What triggers LTC? This is based on either physical or cognitive impairments. There are six physical activities of daily living or ADLs. They include dressing, eating, transferring (from bed to chair), toileting, bathing and continence. Lose two of six ADLs, and the doctor will say it is time for LTC. The doctor may also assign you to LTC if your mental abilities have gone. Who pays for LTC? You do! There are essentially three ways to do that. There is self pay, LTC insurance or Medicaid:

If you can afford the cost, you could just pay for it. FYI, the average cost for a lTC facility in Indiana is more than $6,000 per month. Interesting note, affluent folks tend to purchase LTC insurance because it is a low-cost way to protect their assets.

You can transfer this risk through LTC insurance. There are a variety of insurance products to make this happen, some could cost you nothing if you don’t use the LTC coverage.

There is Medicaid, which essentially means you have no assets, meaning you are on welfare and have limited choices. This is where people often lose their homes.

A recent survey I read said 70 percent of folks over the age of 65 will need LTC at some point in their life. Wow, 70 percent of people over age 65 paying more than $72,000 per year on average. You insure your car, home, health and your life. Are you prepared for LTC? If not, I urge you to contact your agent and ask what options they have available. Understanding what is available costs you nothing! Not knowing could cost you everything. And remember, Medicare does not pay for LTC.

 

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2 Responses

  1. Dennis Byron says:

    Good points. It is also important to understand that there is nothing automatic about the 100 days (20 days with no co-pay and 80 days with co-pay) in the SNF. The average stay is more like 14 days, as you would expect because people are typically there for rehab, Each week after the first week — even every day — has to be determined to be medically necessary

  2. When will you have the conversation with your family about your caregiving and exit strategy?
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