Paying for Care
Some older adults have adequate savings to cover long-term care expenses either in-home or in a facility, but most people do not. For millions of people who may not have relatives with the financial means to help or for those who live alone and have limited income and resources, paying for care can be a challenge.
However, the good news is that for those low-income older adults who qualify, there are a number of options available both on the federal, state and county levels that may help with such expenses.
According to Genworth in 2022, the average monthly cost of nursing home care in Virginia is about $8,200. The average monthly cost of home care for 40 hours a week his about $4,800 and home health care for 44 hours a week is closer to $5,000. Assisted living’s average monthly cost for a private room is $5,200.
It is a good idea to develop a plan concerning how you might pay for such expenses when the time comes. Take a close look at your finances such as income, savings and any investments or life insurance policies that might help with paying for care.
Medicare
Most older Americans over age 65 have Medicare to cover hospital and outpatient care. Sadly, Medicare, the federal government program, covers only a limited amount long term services and supports such as home health care when you need skilled nursing care or rehabilitation. This is even though most older adults will need long-term care at some point in their lives. It does not cover long-term care in a nursing home. Virginia’s Insurance Counseling and Assistance Program (VICAP) can help you with questions about Medicare and Medicare supplement policies.
Medicaid
This federal/state program will pay for long term care in a nursing home if you are low income with few remaining assets. You qualify after spending down your income and any savings/resources (if you have them). People with Medicare may also qualify for Medicaid based on income, assets or very high medical bills. Due to what’s called a state-based waiver, Virginia Medicaid will also pay for long term services and supports, not just care in a skilled nursing facility/nursing home. This means you can receive long-term care at home if you qualify.
Long-Term Care Insurance
For some people, long term care insurance provides a safety blanket because most policies will help pay for a prolonged stay in a nursing home. Some long-term care insurance policies include paying for care you may receive in assisted living or at home. Purchasing such insurance late in life can be prohibitively expensive but compared to the cost of care it may be worth exploring. Be sure to know what you’re buying and what it covers before you sign anything! Virginia’s Insurance Counseling and Assistance Program (VICAP) may be able to help you with questions about long term care insurance.
Life Insurance
The insurance industry also offers hybrid life insurance policies that have a limited amount of long term care insurance built in through riders that are sold at the time of purchase. For those with whole life insurance and cash value, one may borrow against the policy or cash it out if need be. Other insurance options include selling your policy to a life settlement broker. And some term policies allow you to use some of the death benefit to pay for care if you are terminally ill.
Reverse Mortgages
Reverse mortgages may be a workable option for those over age 62 who have equity in their homes and need to pay for long-term care either in an institution or at home. But they aren’t the only option for tapping home equity. For example, you can use home equity loans to get a lump sum upfront. Or, you can use a home equity line of credit (HELOC) that’s similar to a credit card meaning you can borrow what you need.
Veterans
For veterans with Veterans Administration health care benefits, the VA may pay for long term services and supports as well as care in assisted living or a nursing home. (877) 222-8387
Virginia Insurance Counseling and Assistance Program VICAP)
VICAP Counselors can help answer questions about Medicare, Medicare Advantage, Medicare Supplemental insurance, Part D, Special Needs Plans for people who qualify for both Medicare and Medicaid as well as long-term care financing options. They can also assist with appeals, denials and identifying whether you are eligible for low-income subsidies. Unlike much of the advertising you see on TV about saving money on Medicare, this government service is free, unbiased and confidential. (800) 552-3402