The myth that Medicare covers long-term care (LTC) is one of the most pervasive and dangerous impediments to proper retirement planning. As long as people believe that Medicare pays the bill for LTC, they are likely to ignore effective planning solutions, such as long-term care insurance, that actually are available.
Although bashing the government appears to be replacing baseball as the national pastime, there is a government resource that sets the record straight. I’m referring to Medicare.gov's long-term care link (click to view source).
This site compares and contrasts all of the ways to pay for care and the trade-offs associated with each. However, when using the site, consider the fact that, as with any website, it can only run on currently available information; the data available today will not necessary represent the future LTC scenario for today’s 50-year-old visitor, who isn’t likely to need LTC, or any government program benefits to help pay for it, for a decade or more. The site makes it clear that today’s government programs cannot be counted on to provide the kind of long-term care most people want. One need only review the recent history of the Medicare to realize that the program is most likely not going to add coverage for LTC before those pre-retirees need care.
Although the information provided on this website is useful and accurate, it’s also potentially confusing. For example, the site explains: "A study by the U.S. Department of Health and Human Services says that people who reach age 65 will likely have a 40 percent chance of entering a nursing home." I find this statement, while accurate, somewhat misleading. Many people will enter a nursing home for short-term post-acute rehabilitative care that lasts only a few days or weeks. That's the kind of care that is covered by Medicare. But it's definitely not the kind of care that worries most people.
Here's the killer fact, quoted verbatim from the web site: "About 10 percent of the people who enter a nursing home will stay there five years or more."
What I would find amusing, if it weren't so tragic, is this: the government itself is telling people not to depend on the government’s assistance to pay for their long-term care.
"While there are a variety of ways to pay for long-term care, it is important to think ahead about how you will fund the care you get. Generally, Medicare doesn’t pay for long-term care. Medicare pays only for medically necessary skilled nursing facility or home health care. However, you must meet certain conditions for Medicare to pay for these types of care. Most long-term care is to assist people with support services such as activities of daily living like dressing, bathing, and using the bathroom. Medicare doesn’t pay for this type of care called ‘custodial care," says Medicare.gov (click to view source).
Wow, I couldn't have said it better myself! Is it time for you, or your family or clients, to consider private long-term care insurance to pay for future custodial care when the need arises?
Dorothy McMahon, president of McMahon and Associates in Bloomfield Hills, is a specialist offering straight talk on Long-Term Care Insurance. She has brought her program “Speaking from the Heart on Long-Term Care” to professional association and family support group meetings, conferences and neighborhood coffees. Contact her at (248) 844-9787 or LTCINSUSA@AOL.COM to schedule an appointment or a program for your group.
