Private Insurance Plans: Life Insurance Vs. Long-Term Care Insurance
Long-Term Care Insurance Plans
Long-term care insurance is a type of private health insurance that provides benefits to cover some of the costs of services you might need if you develop a chronic illness or cognitive impairment.
Government Programs
In Massachusetts, the state’s Medicaid program, known as MassHealth, currently provides assistance for 65% of all nursing home residents.8 In addition, the Executive Office of Elder Affairs spends 70% of its budget on long-term care services provided in Massachusetts, but pays almost entirely for home and community-based services. To qualify for Medicaid or Elder Affairs assistance, a person may not have income or assets above a certain level.
Medicare
Many individuals incorrectly assume that Medicare will cover most of their long-term care costs. In fact, Medicare pays very little of all long-term care costs. IT IS NOT RECOMMENDED THAT YOU RELY ON MEDICARE TO PAY FOR YOUR LONG-TERM CARE NEEDS.
Medicare covers only the following long-term care services:
- Skilled Nursing Facility Benefit: After you have been in a hospital for at least three days, Medicare may pay for your care while you recover in a certified skilled nursing facility. It will only pay for up to 100 days, and you are responsible for a daily co-payment for every day in the nursing home between the 21st and the 100th day.
- Home Health Benefit: If you are confined to your home, require skilled care for an injury or an illness and meet other specific criteria, Medicare can pay in full for services provided by a Medicare certified home health care agency. Your doctor must determine that you need home health care and set up a plan of care for you. Medicare does not cover personal care services, such as assistance with dressing and bathing, unless you are homebound and are also getting skilled care such as nursing or therapy. Any covered personal care must also relate to the treatment of an illness or injury and you can only get a limited amount of personal care in any week. Additionally, if you purchase a private Medicare Supplement plan (also called a Medigap plan) or enroll in a Medicare HMO plan, these plans will usually not pay for long-term care services that are not covered by Medicare. In Massachusetts, Medicare supplement policies do not cover long-term care costs, but Medicare Supplement 1 and Medicare Supplement 2 policies do pay for the copayments for days 21 through 100 for Medicare-approved stays in nursing homes.
Veterans Benefits
If you are a veteran, you may be eligible for some long-term care services in a Veterans Administration (VA) facility. To find out whether you would be eligible for assistance, contact your city/town government’s Veterans Agent or the Massachusetts Department of Veterans’ Services.
The Home Care Program
This program, associated with the Executive Office of Elder Affairs, provides services to help frail elders live independently in their own home for as long as possible. Services available for income eligible individuals include case management, home health aides, homemakers, home delivered meals, transportation, respite care and adult day care services. These services are provided through Aging Services Access Points (ASAPs) and regional Area Agencies on Aging.
Medicaid
The Massachusetts Medicaid program, known as MassHealth. MassHealth does pay for nursing home care and some home and community-based services for certain income-eligible people living in Massachusetts. To be eligible for MassHealth and receive long-term care services, you must meet state and federal eligibility rules.
Life Insurance Plans
Certain life insurance policies can be used to help finance your long-term care while you are still alive. As with other means of financing, you should check with your financial planner, either an estate lawyer or a qualified advisor, to determine the best course of action for someone in your specific circumstance. Please visit the Division’s webpage on Life Insurance for more information about options.