How Much Does Long-Term Care Cost?

The costs for long-term care vary depending on the service. For example, in 1998, the average cost for a day in a nursing home for private pay patients was approximately $117. Home health care can also be costly. A home health visit by a registered nurse can cost approximately $96, depending on the length of the visit. Home health aide personal care services provided by a home health agency could cost $53 per hour (Wisconsin Department of Health and Family Services, Division of Health, Center for Health Statistics).

Other types of long-term care services can also be expensive if they are provided frequently or for a long period of time.

Who Needs Long-Term Care?

Whether you require long-term care depends on your level of disability. The chances of needing long-term care usually increase as a person ages, but long-term care may be needed at any age.

It is important for you to recognize that at some time in your life you may require long-term care services. Therefore, you should think about how to pay for this care.

In Wisconsin, 3% of all people age 65 to 84 reside in a nursing home. That number increases to 25% for persons above age 85.

The longer a person lives, the more likely it is that he or she will need some kind of long-term care. Some people who have acute illnesses may need nursing home or home health care for only short periods. Others may need care for many months or years. Many people who need long-term care receive that care in their own homes through services provided by home health agencies, relatives, or friends. Others receive care through nursing homes, group homes, or assisted living facilities.

Who Pays for Long-Term Care?

Private Individuals

In most cases, either you or your family will be responsible for paying for long-term care. Other sources of payment include Medicaid (Medical Assistance), Medicare, veterans' payments, and private insurance. Many persons who require extensive long-term care eventually "spend-down" their savings and other resources and become eligible for Medicaid.

Medicare

Medicare is the federal program that helps pay hospital and medical costs for those who are 65 or older and some disabled persons. It provides very limited coverage for short periods of time for nursing home and home health care but does not cover any long-term care services for extended periods of time.

Nursing Home Care

If a nursing home stay is approved by Medicare, the program pays in full for up to 20 days of skilled nursing care in a skilled nursing facility approved by Medicare. However, Medicare will pay for your stay only if it follows a hospitalization of at least three days and you enter a Medicare-certified nursing home within 30 days after hospital discharge. From the 21st to the 100th day, Medicare pays part of the cost. Medicare pays nothing beyond the 100th day. Very few nursing home stays are covered by Medicare. This is both because many nursing homes do not participate in the Medicare program and because Medicare defines "skilled care" in a very restrictive way.

Home Health Care

Medicare covers only those home health care visits that Medicare considers to be medically necessary. Medically necessary care is defined quite narrowly and you must meet certain other criteria before Medicare will pay for the care. For example:

• The care must include part-time skilled nursing care, physical therapy, or speech therapy;
• You must be confined to home;
• Your doctor must set up a home health plan; and
• The agency providing services must participate in Medicare.

Most home health care visits do not meet Medicare's definition of medically necessary care. Therefore, Medicare will not pay for them.

Medicare provides only limited coverage for long-term care related primarily to recuperating from a sickness or injury. Medicare pays only for skilled nursing care and medically necessary services. You should not rely on Medicare to pay for your long-term care needs.

Medicaid

Medicaid, also known as Medical Assistance or Title XIX, is a government health care program paid for by state and federal governments. To be eligible for Medicaid:

• You must be 65 or over, disabled, or in a family with dependent children;

and

• You must have low income and few assets; or
• You must be paying so much money for health care that you have very little income left.

For eligible persons, Medicaid pays for most health care costs, including nursing home and community-based care.

Nursing Home Care

Medicaid is a major source of payment for nursing home care. About 74% of all nursing home residents in Wisconsin receive help with their nursing home costs. To qualify for Medicaid nursing home benefits, you must be a nursing home resident and require medical, nursing, and/or therapeutic care on a daily basis, and be under a doctor's plan of treatment. Even after you become eligible for Medicaid, you will have to use most of your personal income first to pay nursing home bills. Medicaid will pay remaining costs (Wisconsin Department of Health and Family Services, Division of Health, Center for Health Statistics).

Many residents of nursing homes who receive Medicaid are able to pay for their care themselves when they are first admitted to the nursing home. Over the course of a long nursing home stay, many people use most of their savings to pay for their care, and then become eligible for Medicaid (Wisconsin Department of Health and Family Services, Division of Health, Center for Health Statistics).

Home Health Care

Medicaid may pay for services you receive in your home. However, you must be under a doctor's plan of care, have medical needs that can be met in your own home, and receive services from a home health care agency certified by Medicaid.

Personal Care

Medicaid also pays for personal care, such as assistance with bathing, dressing, eating, or getting in and out of bed. Medicaid will pay for personal care services if you are under a doctor's plan of care and the services are provided by a member of a personal care agency certified by Medicaid. You may also be eligible for a limited amount of necessary household help such as grocery shopping, meal preparation, or laundry.

Community Options Program

If you live in Wisconsin, you may be eligible for the Community Options Program. This program provides community-based long-term care services if you have a limited income and assets, and would otherwise need to be in a nursing home. All or part of the cost of the care can be paid by a special state-funding program or, in some cases, Medicaid. The Community Options Program offers a wide range of services including personal care, respite care, adult day care, transportation, and even necessary help with household chores. Information on eligibility for the Community Options Program may be obtained from your County Human or Social Services Department or Certifying Tribal Agency or the County or Tribal Elderly Benefit Specialist at your county aging agency.

 Spousal Impoverishment Protections

If you are married and have a spouse who is receiving long-term care in a nursing home, the law permits you to keep a certain amount of monthly income and retain a certain amount of assets regardless if your spouse's long-term costs are being paid by Medicaid. The amount you are allowed to retain is in addition to the family home and other noncounted assets. (Department of Workforce Development, Division of Economic Support, Bureau of Welfare Initiatives).

The amount of assets to be protected (called the Community Spouse Asset Share) is calculated based upon their assets at the first time the individual goes into a long-term care medical institution. The caseworker determines the amount to be protected for the community spouse, using the following criteria:

• If the total countable assets are $174,000 or more, then the individual can protect $87,000 (in 2001) of the couple's assets for the community spouse.
• If the total countable assets are $100,000 or less, then the individual can protect $50,000 of the couple's assets for the community spouse.
• If the total countable assets are less than $174,000 but greater than $100,000, then the institutionalized individual can protect HALF of the assets for his or her community spouse.

The maximum amount can be increased by court order or as ordered by an administrative hearing officer.

How is a couple's income treated?

The person receiving long-term care must still meet Medicaid income limits to qualify. Only income that is in the spouse's name who is receiving long-term care is counted in determining his or her eligibility for Medicaid.

Spousal impoverishment protections increase the amount of income that is protected for the community spouse, usually by reducing the amount that the couple is required to pay out-of-pocket for long-term care expenses.

The spouse receiving long-term care can transfer enough income to bring the community spouse's total income up to the LESSER of $2,175.00 a month or $1,875.00 plus excess shelter allowance.

"Excess shelter allowance" means shelter expenses above $562.50. Shelter expenses are mortgage, rent, taxes, maintenance fees, and a utility allowance.

More information about spousal impoverishment is available from your county Human or Social Services Department or Certifying Tribal Agency.

The Department of Health and Family Services also publishes a booklet, What is Spousal Impoverishment, that provides more information about the program.

Estate Recovery Program

Wisconsin has an estate recovery program through which the state seeks repayment of Medicaid payments for care received while the recipient resided in a nursing home. The program also seeks recovery of certain noninstitutional Medicaid benefits for recipients over age 55. The recovery is made from the estate of a recipient. An estate includes all assets owned by a person at the time of death.

The Risk of not buying Long-Term Care Insurance

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Last modified: 12/31/11