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Paying for Long Term Care

The following five (5) sources of payment are commonly used to pay for long term care.  You must check with each facility prior to admission to determine which method of payment they accept and/or to determine what insurance benefits may be available to the resident.  


You can use your savings or other personal resources to pay for long-term care. This is also called "self-insuring". Some personal resources may include money in a checking or savings account, stocks, bonds, investments, life insurance policies, pensions, and income, such as Social Security.  The following list is an example of some of the items you may be charged for:

  1. Room & Board:  a specified daily room rate, either Private or Semi-Private room accommodations.  Rates may vary within units of a facility.
  2. Rehabilitation Services
  3. Medications
  4. Physician's fee
  5. Incontinency products  (bowel or bladder)
  6. Medical supplies
  7. Personal Care items
  8. Oxygen


Long term care insurance generally covers room & board at a set rate stated in your policy.  The policy will often state what services are covered as well as the length of coverage. If the daily room rate exceeds the rate that is set in your policy; you are obligated to pay the difference.  Additionally, you may be required to pay for ancillary items or services.


Medicare is a Health Insurance Program for:

  • People age 65 or older.
  • People under age 65 with certain disabilities.
  • People of all ages with End Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant.

Medicare has multiple parts that provide coverage:

Part A (Hospital Insurance - hospitals and nursing facilities)

Part B (Medical Insurance - physician services and rehabilitation services)

Part D (Prescription Drugs)

Part A (Hospital Insurance) helps pay for: Care in hospitals as an inpatient, critical access hospitals (small facilities that give limited outpatient and inpatient services to people in rural areas), skilled nursing facilities (not custodial or long-term care), hospice care, and some home health care. Information about your coverage under Medicare Part A can be found in the Your Medicare Coverage database.

In order for Medicare A to cover a stay in a skilled nursing facility (SNF) certain eligibility requirements must be met.  You must have a 3 day qualifying stay in an acute hospital prior to entering a SNF.  A physician must certify that you need skilled care.  Medicare will cover, if eligible, a benefit period of up to 100 days.  The first 20 days of your stay are paid 100%.  From the 21st day to the 100th day, Medicare pays a portion of the daily rate; you are responsible for the remaining balance.  The remaining balance is called coinsurance and the rate varies from year to year (2009 rate = $133.50 per day).  If you have a supplemental insurance policy, the coinsurance may be covered by that policy.

If you aren't sure if you have Part A, look on your red, white, and blue Medicare card. If you have Part A, "HOSPITAL (PART A)" is printed on your card.

Part B (Medical Insurance) helps pay for: Doctors' services, outpatient hospital care, and some other medical services that Part A doesn't cover, such as the services of physical and occupational therapists, and some home health care.  Part B helps pay for these covered services and supplies when they are medically necessary.  Information about your coverage under Medicare Part B can be found in the Your Medicare Coverage database.


The Medicaid program provides coverage for long-term care services for individuals who are unable to afford it.  Although the Federal government establishes general guidelines for the program, the Medicaid program requirements are actually established by each State. Whether or not a person is eligible for Medicaid will depend on the State where he or she lives. Each state has different Medicaid eligibility income and resource limits.

Many groups of people are covered by Medicaid.  Even within these groups, though, certain requirements must be met.  These may include your age, whether you are disabled, blind, or aged; your income and resources (like bank accounts, property, or other items that can be sold for cash); and whether you are a U.S. citizen or a lawfully admitted immigrant.  The rules for counting your income and resources vary from state to state and from group to group.  There are special rules for those who live in nursing homes. 

When an individual applies for Medicaid coverage for long-term care, States conduct a review, or "look-back," to determine whether the individual (or his or her spouse) transferred assets (e.g., cash gifts to children, transferring home ownership) to another person or party for less than fair market value.  The "look-back period" is 60 months (five years) prior to the date the individual applied for Medicaid.  In general, you should apply for Medicaid if your income is low and you match one of the descriptions of the Eligibility Groups.  (Even if you are not sure whether you qualify, if you or someone in your family needs health care, you should apply for Medicaid and have a qualified caseworker in your state evaluate your situation.)


Hospice care is suitable when you no longer benefit from treatment and you are expected to live six months or less.  Hospice provides palliative care, which is treatment to help relieve symptoms, but not cure the disease; its main purpose is to improve your quality of life. You, your family, and your doctor decide together when hospice care should begin.  In most cases, an interdisciplinary health care team manages hospice care.  This means that many interacting disciplines work together to care for the patient.  Doctors, nurses, social workers, counselors, home health aides, clergy, therapists, and trained volunteers care for you and offer support based on their special areas of expertise.  Together, they provide complete palliative care aimed at relieving symptoms and giving social, emotional, and spiritual support.

In most states, many sources such as Medicare, Medicaid, the Department of Veterans Affairs, most private insurance plans, HMOs, and other managed care organizations pay for hospice care.

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