The options to pay for long-term care at home or in a hospital, assisted living, or memory care facility, depends on their financial situation and the extent of care they will need. In most cases a variety of payment options are used (personal funds, government programs, and private payments).
Many seniors start paying for care with their own money. As the extent of care is realized they shift from personal savings to accessing a pension or other retirement fund. For prolong periods of care income from stocks and bonds or proceeds from the sale of a home are used. Medicaid may pay some costs for people who meet financial and health requirements.
1) Medicaid
Some people may qualify for Medicaid, a combined Federal and State program for low-income people and families. This program covers the costs of medical care and some types of long-term care for people who have limited income and meet other eligibility requirements.
2) Medicare
Medicare pays some medical costs for people aged 65 and older, and for all people with late-stage kidney failure. Medicare does not cover ongoing personal care at home, assisted living, or long-term care. Here are brief descriptions of what Medicare will pay for. Medicare will cover care costs that are restorative but not custodial care.
3) Supplemental Security Income (SSI)
SSI is another program that provides monthly payments to adults aged 65 and older who have a disability. To qualify, your income and resources must be under certain limits.
To find out more about these SSI programs, call 1-800-772-1213
4) Veterans Affairs (VA)
Qualifying veterans may be eligible for long term care benefits through the U.S. Department of Veterans Affairs (VA). The VA may provide long-term care or at-home care for some veterans. If your family member or relative was a veteran they may be eligible for veterans’ benefits, check with the VA medical center nearest you.
To learn more about VA healthcare benefits, call 1-877-222-8387.
5) Long-term Care Insurance
Some life insurance policies offer a combination product of both life insurance and long-term care insurance.
Long-term care insurance covers many types of long-term care depending on the type of policy and selected services to be covered. Exclusive nursing home coverage or a comprehensive policy including both home care and facility care can be purchased.
The cost of a policy is based on the type and amount of services, how old you are and current health condition when you buy the policy along with the optional benefits you choose. Someone who is in poor health or already receiving end-of-life care services may not qualify for long-term care insurance.
6) Reverse Mortgage
A reverse mortgage is a specific type of home loan that lets a homeowner convert equity in their home into cash. With reverse mortgage loans no repayment is required until the borrower sells the home, no longer uses it as a
main residence, or dies.
There are no income or medical requirements to get a reverse mortgage, but you must be age 62 or older. The loan amount is tax-free and can be used for any expense, including long-term care.
7) Accelerated Death Benefit
Policies with an "accelerated death benefit" provide tax-free cash advances while you are still alive. The advance is subtracted from the amount your beneficiaries (the people who get the insurance proceeds) will receive when you die.
You can get an accelerated death benefit if you live permanently in a nursing home, need long-term care for an extended time, are terminally ill, or have a life-threatening diagnosis such as terminal cancer. Check your life insurance policy to see exactly what it covers.
8) Life Settlement
You may be able to raise cash by selling your life insurance policy for its current value. This option, known as a "life settlement," is regularly available only to people aged 70 and older. The proceeds are taxable and can be used for any reason, including paying for long-term care.