Who pays for long term care?
Nationally, one third of all nursing home expenses are paid out-of-pocket by individuals and their families, and about half are paid by state Medicaid programs. Medicare, Medicare Supplement Plans, Medicare HMO’s and traditional health insurance plans are designed to pay for hospital and doctor costs, not to pay for long term care services. In fact, Medicare pays only about 10% of all long term care costs (including only 5% of all nursing facility expenses). A study performed by the Health Care Financing Administration, which administers Medicare, showed that the majority of nursing facility costs are paid with the personal assets of the individual receiving the care, or by Medicaid if the individual had no personal assets. To receive Medicaid assistance, you must meet federal poverty guidelines for income and assets on health care. When you have spent down your assets, you then will be eligible for Medicaid.
About half of all long term care expense is paid by state Medicaid programs. About one-third is paid out of pocket by individuals and their families. Medicare only provides for some skilled care in some limited situations. Neither Medicare supplemental insurance nor major medical coverage provided by most companies pays for long term care. This leaves approximately one sixth of the total cost to be covered by other government programs and private insurance.
