A big area of confusion – and made so by design – is how and what is paid for by whom when it comes to needed care and assistance.

Most folks of a certain age believe that there are federal or state programs that will take care of their needs as their health declines, and that this is taxpayer paid. Primarily because that is what they have been told by politicians for years. And for the most part, it is completely false. So I am going to break down what is out there (in the US) federally. And what is covered by states I am familiar with – obviously YMMV. Some states offer more, and far too many offer less.

Medicare is the federal program that provides medical (and only medical) care to those who are either over 65 years of age or who are disabled. For disability qualification you have to have been eligible for Social Security Disability for two years or have end-stage renal disease. Medicare has no income eligibility, anyone who qualifies can receive it.

Medicare has various programs that cover hospitalization (A), medical (B), private “Advantage” programs (C), and prescription drugs (D). As can be expected these are not straightforward, so doing your homework or getting help in deciding on specific coverage is essential. The big issue I want to note here is that this is MEDICAL ONLY.

This is important because while a stay in a nursing home can be covered by medicare if the patient needs ‘skilled nursing care’ – it will not cover care for someone who simply requires assistance with personal care, feeding, taking medications, etc. – this is known as ‘custodial care’.  It is a common misconception that this is covered and it is not. There are quite a few agencies who can supply caregivers to provide either round-the-clock or intermittent custodial care, as well as homemaker services. These can count towards the ‘spend down’ discussed further in.

Medicare also pays for the hospice benefit. Other insurances may also offer hospice coverage that will vary depending on the plan. Medicare hospice coverage is a specifically structured program that provides for medication and support for a qualified medicare recipient who has part A coverage. The patient must have a medical diagnosis with a less than 6 month prognosis and meet the requirements of that particular diagnosis as determined by their regional CMS (don’t ask, complicated bureaucratic BS). That benefit covers nursing visits at home, visit from an aide for bathing care, social worker, volunteer coordinator, chaplain and various other therapists as approved. It also covers durable medical equipment (such as a hospital bed, bedside commodes, lifts, wheelchairs, medication pumps, etc) as well as medications related to the terminal diagnosis. Note that the hospice benefit is in addition to the regular medicare benefit – it covers everything related to the terminal diagnosis only, but regular medicare will cover other stuff. So if you have a heart condition but are on hospice care for cancer, your cardiology care is still going to be covered by your regular medicare.

Once again however – this is NOT around the clock care. There is no caregiver who comes to ‘take care’ of the patient at home. The visiting nurse performs the same function as the physician would perform if you went to their office (although we don’t tend to hang onto the door handle and start to look anxious after 15 min!). The bath aids come in and can bathe, change sheets, and help out with the patient but their visits are time limited as well. There MUST be a caregiver at home to give care to the patient if they are unable to do self care, and a plan must be in place for care when they can’t. Hospice care can continue even if the patient is in an assisted living or convalescent home. It can even be provided in a nursing home in many places. While part of the benefit that is required to be covered includes ‘inpatient’ care if needed and respite care, the reality of what that entails and if it is available at all varies dramatically. Everyone is required to state they offer it, but my experience has been that if you think you would need that then look for a larger, well funded (as in lots of private donations), or non-profit medical center affiliated hospice. Because realistically hospices that just get their money from medicare reimbursement cannot afford to offer those services.  Again, this is the reality I have observed as a nurse and as a family member and referral source for friends.

Okay – so the next thing is Medicaid, or whatever your state’s version of low-income coverage is called. Medicaid is federally funded, but state administered and is based on income eligibility. It covers different stuff than Medicare, and can pay for the ‘custodial care’ that Medicare does not cover. It has strict income limits, and for most folks if you qualify for Social Security Disability you will have too much income to qualify for Medicaid – but ymmv! Typically for a senior on Medicare who needs custodial care, they will have to go through a period called a “spend down” before they can get Medicare coverage for residential care. This involves selling assets and spending all money down to a point where your total asset value is below a set (very low) limit. It is EXTREMELY important to know that giving gifts is NOT an approved way to spend this money, and signing over assets to family members or others means that there is a five year wait before those gifts are no longer counted against your income. If this may apply to you, your best bet is to contact an attorney to consult about care planning for the state you will be living in and to review your best options. Just keep that 5 year timeframe in mind if you even suspect you might need Medicare at some point!

Since state benefits vary dramatically on what is covered by Medicaid, your best bet is to look up the website for your state and see what programs are included. These programs typically cover medical care for folks who have not yet qualified for Medicare coverage, medical coverage for kids from low income homes, and medical care for low-income pregnant persons. Again, these programs can vary widely from state to state.

Some states even have either Medicaid or other programs that could offer some in-home assistance. Some state Medicaid will allow a family caregiver to be paid for their services, while other states will only pay for non-family caregivers. You can also check with churches, your tribe, state senior or disabled assistance agencies, and private agencies like the American Cancer Society or the Alzheimers Association for lists of local resources. The big message here is that overall, there is NO universal or consistent coverage to care for someone either at home or in a care facility simply because they need it. My mantra has been, sadly “Yeah, nobody pays for that.” So when doing care planning it is really important to realize that someone(s) is going to have to be the caregiver. That could be someone(s) you hire, or family member(s) or friend(s).

Social Security – Social Security provides an income for those over age 67 for my age group, for those who qualify due to disability, and for qualifying surviving spouses and children of a deceased taxpayer. This is a not insurance coverage, it is income. If you are disabled and applying for Social Security disability the best advice I can give you as a veteran of that particular system (as a disabled person) is to get a lawyer sooner rather than later. It is a messed up system that is NOT designed to work for you no matter how compliant you are in jumping through the hoops. Again, IANAL and YMMV.

Further I am going to post a quick bit of advice from me as both a caregiver and ‘beneficiary’ of some other systems you may encounter – I will preload this by saying this represents my experiences and those of others who have shared their experiences and reflects my conversations with a lawyer regarding my specific case. I share this stuff because it is my belief that my experiences are very likely representative of the general population rather than exceptional. But again  – not a lawyer and you may have completely different experiences, please consult with an attorney for specific advice.

Other insurance – short-term and long-term disability. These coverages are sold commercially, as well as often being offered as add-ons to your employment benefits package. You pay a premium per check for coverage that will reimburse you for lost wages should you have a health issue. Short-term disability is intended to cover stuff that might take you out of your job for a recovery period – surgery, for instance. It kicks in after a specified waiting period and will generally cover some percentage of your salary. You must apply for this and have your claim approved, like any other insurance. In my experience this tends to be pretty straightforward and generally does what it says on the tin.  Long term disability is another kettle of fish entirely. Long term disability is for when the time limit is reached on your short-term disability. So if you are not recovering and will need to be out of your job past that time frame, you will have to place a claim to be approved for the long-term income replacement benefit. This also applies if you are permanently disabled and will not be returning to work (again, check your policy to see EXACTLY what the terms are). Good luck with that. Long term disability is much, much better at collecting premiums than they are at paying claims. And even being approved for Social Security Disability does not make any difference on the approval or denial of your LTD claim.

Think about that one. There have been a LOT of loopholes carefully drilled in the laws and regulations covering long-term disability, and for far, far too many people that means that their belief that they were paying for security and taking responsibility so they could pay bills no matter what has met the cold, hard reality of corporate profit-seeking. Your claim will come back denied based on the medical report of someone you have never heard of or seen who is employed by the insurance company to go over all your medical records and find any reason whatsoever to deny the claim, even early misdiagnoses that are later corrected. And the way the game is played is that each claim you make will be held out for the full legal length of time allowed to respond, with as many extensions as they can add before each denial that you have to contest. So typically a claim can take several years from initiation to the final denial. Of course the goal is that you will die or give up. Maybe get your SSDI and drop it. After the final denial your only option is to hire a lawyer to pursue it, and there are plenty of groups that do nothing but pursue these. But be aware that those loopholes I mentioned could also mean that you are told that while you are undeniably and clearly disabled you do not have a winnable case against the insurance company. If I were ever in a position to be offered LTD again, or when it comes up for friends and family, it seems to me (not a lawyer or financial planner) that you would be better off saving that money in some sort of income-producing fund that you KNOW you could access in case of emergency rather than giving money to an insurer (whose profit incentive is to deny your claim) that you may very well never see again.

To wrap up, it is important to know when you are planning for needs and care what resources are available. Ensure that any benefits – whether those above or other benefits such as veterans or employer benefits – have been accessed, and research on locally available resources can also help ensure that you have what is needed for care whether at home or in a facility.