Government Doesn't Pay For Long Term Care
Many people think that the government will fund your Long term care needs. This is false. At least in the way that most would view the funding.
Your private or group health insurance takes care of you when there's an expectation of improvement and it is delivered by individuals with a lot of training. Doctors, registered nurses, physician assistants, nurse practitioners, they utilize skilled care, examples being tube feeding, IVs when there's an expectation of improvement.
Medicare is health insurance. Long term care is utilized when the client is not getting better and the care is categorized as non-skilled care, we don't need a physician to help us with the six ADLs or activities of daily living.
Think of health insurance and Long term care as bookends. One helps you when you are getting better. And the other helps you when you're not getting better. We're going to touch on each one of the aspects of the government that many think will pay for Long term care.
Let's start off with Medicare. Medicare is health insurance. We just learned that your private health insurance or Medicare help you when you're getting better and do not pay for Long term care more about that in a future video. Many people think that disability income and Long term care are the same.
Remember disability income generally replaces a portion of your income while you are working and you have to be physically as well as financially underwritten for it. Generally, the way that the Medicaid system works is that in order to qualify, you have to disclose your assets and where they are to the government. The government then advises you to spend down your assets to certain minimum income and asset levels. They may also place liens on properties that you have and may recover funds from this upon your passing, depending upon the state that you live in.
At this point, the government may fund your Long term care and it's generally in a semi-private room in a state run nursing facility. Taking this tact can upset many things financially for a family among them income, plans for gifting, financial promises that have been made, invasion of principal. Ironically, many folks say a place that they will never go to is the nursing home.
The translation here is if the Long term care issue and its associated challenges present itself to you, your family and your finances, it is you that will fund the Long term care issue. It just remains to be seen if it's on a retail basis, I.E. you're paying whatever the going rate is for your area, depending upon the venue you're getting care in or on a wholesale basis.
For instance, buying an insurance product to fray the cost of Long term care. Many mistakenly believe that Medicaid is free. Nothing could be further from the truth. In fact, what we know about Medicaid is the following.
If it were free, why would the government have you disclose your assets? And then have you spend them on your care prior to getting involved? Medicaid generally provides care and the venue the clients tell us they will never go to. The nursing home. You will have little to no control as to how your care is delivered.