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TOP 10 Ways to pay for senior care

1. Private funds may be available, and if so, consider yourself lucky if they cover the entire cost of senior care. The average cost in 2008 for a semi-private room is $187/day in a nursing home, and $100/day in an assisted living. Fortunately, many places offer incentives, so be sure to ask what special rates are available and if there are any fees or additional fees above the daily or monthly rate. Additionally, ask if and by how much rates increase each year.

2. Long term care insurance through an individual policy, group policy (through an employer or trade-organization) or through a life insurance policy (see #9) will cover a daily or monthly rate based on your coverage. They may require an initial statement from the senior care provider and a physician’s assessment.

3. Medicaid is state-subsidized coverage for long-term care. A long-term care facility must have a Medicaid license to accept Medicaid funds. Nursing Homes, Assisted Living and Residential care homes may have Medicaid-licensed beds. Community-based Medicaid coverage will cover alternative services for home care, including personal assistance, adaptive devices and medical supplies. It may also cover emergency care, minor home modifications, nursing services, therapy, and respite care. Eligibility for coverage depends on monthly income. There will usually be some additional out-of-pocket expense since Medicaid usually does not cover the entire daily rate for care. Medicaid can cover your Medicare (see #4) copay.

4. Medicare pays for health care on a short-term basis. It does not cover long-term care. It is a health benefit for those over age 65 or those with disabilities. However, if you are under agePart A coverage includes inpatient medical care, skilled nursing care or rehabilitation following a hospital stay. It will also cover home health and hospice care. Typically, Medicare covers 100% for a certain amount of time, after which you will be required to pay 20%. This is also called a copay. Medicaid (see #3) or a supplemental insurance (see #5) may cover your portion. If you pay the additional premium to have Medicare Part B benefits, you will have coverage for outpatient care such as home health and physician services.

5. Supplemental insurance is offered through private insurance companies. For a monthly premium, the insurance will cover the portion of your medical costs not covered by Medicare. This is also referred to as “Medigap” insurance.

6. Veterans Benefits are available through the Veteran’s Services if you are a veteran and meet other income requirements. Benefits can cover adult day care, home health, assisted living or nursing home care. For more info and to download the application, visit our Spotlight Interview with Veterans Services.

7. Life insurance can have provisions typically called accelerated death benefits in which a portion of your benefit becomes available for use in the event of a terminal illness, catastrophic event, or long term care need.

8. Reverse mortgages are available for homeowners 62 years of age or older. The homeowner receives money by borrowing a portion of the equity from their home. The loan is then due when the owner dies or sells their home, after which the home is used to pay off the loan. While there are different ways that these mortgages are setup, typically the borrowers must have substantial equity in their home to qualify.

9. Annuity contracts can have provisions specifically for long term care coverage in which a percentage of annuity payouts can be allocated towards long term care expenses.

10. Life settlements / Viatical settlements can be sold to some companies for a percentage of the death benefit. In a viatical settlement, the insurer has less than two years to live. These have also been called “senior settlements.”

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