Planning how to pay for nursing home care for a loved one is a large task. Identifying what financing options are available to you is the first step to ensure your family member gets the appropriate care they need. There are several different ways to pay for professional care — some at no cost through government benefits.
Insurance for Nursing Home Care
Depending on which type of life insurance policy your loved one has, it’s possible for seniors to liquidate their policy early for cash. One form of this is through a chronic illness benefit, such as Farm Bureau’s Daily Living Benefit Rider. In this situation, Client/Members can accelerate a portion of their policy’s death benefit if they are unable to perform at least 2 of the 6 Activities of Daily Living and have been chronically ill for at least 90 days and are predicted to continue to be ill. It’s important to note this is available through an additional premium but is typically much lower than a standalone Long-term care insurance (LTC) premium. Be aware, the amount of benefits taken from the life policy each year may be subject to taxation if it exceeds a certain amount in your state.
Long-term Care Insurance
Those who have long-term care insurance have usually selected this policy for the benefits related to covering the costs of care. This payout begins usually after a medical event triggers the need for care. It is important to point out, premiums are still due and increase with the advancing age and/or the declining health of the individual.
Self-funded or Private Payment Options
Covering the cost for long-term care can be done out-of-pocket or through savings. This way is the most obvious, by taking your personal funds from your checking or savings account to make nursing home payments. There are other means of financing the cost of an individual’s stay. This can be done by using cash flow from pensions, retirement income, or by selling stocks and homes. It is important to remember that nursing home care is quite expensive, causing your assets to deplete quickly, and sooner than you may expect.
Government Assistance Programs
Medicaid is a federal and state program that provides coverage for low-income individuals. If your income or assets are greater than Medicaid’s limit, you will be unable to qualify. It’s possible to pay for care out of pocket until your personal assets and income are reduced under Medicaid’s threshold, which then may allow you to qualify.
Medicare is a federal program that provides health coverage for those over the age of 65, or for those under the age of 65 with a disability, regardless of income. This government program primarily covers short-term nursing home stays and can be used for those who need immediate care. Since Medicare is meant for rehabilitating patients, it covers the full cost of care for the first 20 days and pays a portion for days 21-100. It’s important to point out that Medicare has a narrow definition of skilled nursing care and provides limited benefits for care.
- VA Benefits
VA benefits are offered to senior veterans who need long-term care. The specific coverage is determined by each individual’s health needs. To be eligible for VA, veterans need to sign up for VA healthcare and meet certain eligibility requirements.
Whichever option you think is best for you and your loved one, we’re here to help. Connect with a Farm Bureau agent today to discuss your options.