Navigating with Nurse Derrick

• Summary
• Start now
• Health insurance wont pay for it until you’re broke
• Check your assumptions
• Health insurance perspective vs human perspective
• Stop avoiding
• Some of what may be covered
• The cost and how many of us may have to pay it
• What you can do now

Summary

70% of Americans will need long term care. Nearly half of Americans will have to pay for long term care. Long term care is not considered medically necessary and is therefore not covered by health insurance until you are broke. 

Once your finances are in bad enough shape, long term care is covered by Medicaid based on qualifying factors. If you need placement in a facility, many don’t accept medicaid as they’re private pay only. For those that do accept medicaid, your placement is subject to facility availability. (There was a 6 month estimated wait for a bed (not a private room) at a facility I visited recently.) 

The average annual cost to you for a single room in a nursing home was $108,405 in 2021. (That is $37,621 more than the average median US income of 2021.) 

There are options to help you prepare now, but they are by no means safety nets. The AARP states one should start planning for long term care in their 20’s, not wait until their 60’s. 

If your work offers long term care insurance – invest in it through work now. If not, a financial advisor will be able to guide you through long term care insurance and other options like a healthcare savings account or other products of which I’m not aware. 

Check with your Area Agencies on Aging for resources for more information, especially if long term care is something you’re facing in the near future. Also, if you’re a veteran, check your veteran benefits for long term care. They may not be what you’d hope, but they’re something. You’ll still have your work cut out for you. 

Start now.

In the US, long term care is not something for which you should wait to prepare. If you wait until you’re in your 60s to figure this out, you may be too late. If you think it doesn’t affect you and you plan to live to the age of 65, then there is a 70% chance you’re wrong.

Before I became a nurse I hadn’t thought about things like long term care. Who does? Most people who think in long term goals are focusing on retirement. They’re not thinking about how they will receive care when they cannot care for themselves. At this point in my nursing career, however, I’ve seen too many people hurt by not having that foresight, so I started looking into it. 

Health insurance wont pay for it until you’re broke

If you fall into the likelihood of that 70%, you should know your health insurance, including Medicare, most likely does not cover long term care. Long term care is considered, “custodial care,” not medical care.

Once long term care has depleted your assets you may qualify for Medicaid (if it is still available by the time you need it), which does currently cover aspects of long term care. But qualifications can be stringent and not all facilities accept it, or have vacancies for it. 

Check your assumptions

Our healthcare system is a quagmire. It is a bog of commercial healthcare mixed with commercial health insurance mixed with government oversight. Seemingly the ground sinks with every step and it’s nearly impossible to wade through. 

Many assume the worst from the commercial aspect of healthcare, and at the same time assume parent-like protectiveness from the government oversight aspect of it (and from healthcare workers). Like any quagmire, assumptions can get you stuck. 

I’m not attempting to carry a torch here to change our healthcare system or how it works (or doesn’t). I’m carrying a torch to help you navigate the healthcare system we have.  

Health insurance perspective vs human perspective

As I’ve already made clear: from a health insurance perspective, long term care is not considered health care. It’s considered, “custodial care.” This is where someone comes in and helps you with activities of daily living (ADL’s), household duties, and general safety and supervision. Activities of daily living (ADL’s) include eating, bathing, toileting, dressing, walking, being able to get out of your bed and into your wheelchair, being able to move your wheelchair, etc.

I think you’ll agree with me that from a human perspective, long term care, or, “custodial care,” is healthcare. Without it, most of the people who need it would be dying miserable deaths via non-healing wounds, sepsis, starvation, dehydration, etc. But in terms of definitions supported by government oversight and in relation to health insurance, long term care is not healthcare. This common misconception is the gap at the heart of this post. 

Stop avoiding

There are many contributing factors to this gap in our healthcare system that we cannot control. However, I think one factor we can control is our avoidance of digging into it and understanding it. 

Many of us avoid trying to understand what it is to age in the US, as well as the fact that we are all actively doing so, right now, in real time. Reading this post is a good first step in taking some control back, so good on you.  

In my past personal avoidance of healthcare, I used to assume a person who cannot live alone due to their medical condition would have coverage for 24 hour care through their health insurance. Their medical condition is life threatening if they’re left alone, so the assumption makes sense. The condition means they’ll likely die without a caregiver to get their food for them, help them get and take their medications, help them get to the bathroom or get cleaned up if their condition leaves them incontinent, etc..

But as you’ve probably already guessed, that assumption is wrong. And I’m glad I caught on before it caught up with me!

Some of what may be covered

My current understanding is that medical insurance, with exception to Medicaid, will not cover those basic needs. 

It may cover a visiting RN who comes and gives intravenous medications. That RN might be there for thirty minutes to an hour three days a week or so. Medical insurance will likely cover the medications, doctor appointments, and possibly even transportation to those doctor appointments. Those are all considered “medically necessary.”

Who gets that person on the bus, though? Who answers the door when the RN knocks to come administer medications? Who helps that person make a meal and reminds them to eat, cleans them when they’ve soiled themselves with a bowel movement? Who helps them get up without falling? Who gets them off the floor when they fall?

Though some of those tasks are necessary for life, they are not considered “medically necessary” even if the loss of the ability to do them is a symptom of the disease. (Consider Alzheimer’s, dementia, Parkinsons, heart failure, end stage COPD, end stage kidney disease, etc.)  And so because those basic needs are not considered “medically necessary” they are not covered by health insurance. 

The cost and how many of us who may have to pay it

According to the US Department of Health and Human Services, this is the type of care that 70% of Americans who reach the age of 65 will need. Almost half of us (48%) who reach that age will have to pay for that care. The other 22% have families that are capable and willing to do those things, or get free care some other way.

So, now that you understand that nearly half of us will need to pay for that type of care, here’s the next stat: A 2021 study from the Consumer Financial Protection Bureau found that the median annual cost of a single room in a nursing home was $108,405. 

You should note, there are differences between nursing homes, assisted living, memory care, independent living, long term care facilities, adult foster care, you name it. I’ve seen the same adult foster care charge two different people $4,000/month and $8,000/month with no noticeable difference in rooms or services. It’s possible the difference in cost was the amount of care required, but I couldn’t see that. It’s possible that one family just agreed to a price and another one haggled. I don’t know what kind of oversight these different commercial facilities have. 

So where does all that fit into your retirement planning? Where does that fit into your spouse who survives you having resources if long term care for you before you pass depletes your combined nest egg? Where does that fit into leaving something behind for your kids and family? 

What you can do now

My advice is to talk to a financial advisor. Yep. Finance is what it’s about. Hope that didn’t turn you away!

A financial advisor should be able to guide you through the risks-rewards of long term care insurance vs a healthcare savings account vs some other type of account just focused on providing for your long term care some day. 

You should also check out your Area Agencies on Aging. If you’re a veteran, look into veteran benefits. Do not just assume they’ll cover you. The numbers in that link looked pretty low in terms of long term care aid for our veterans. 

For the rest of us, it may come down to Medicaid, assuming it’s still funded when the time comes. 

Just know that it is tough to qualify for Medicaid. I believe Medicaid will audit the last five years of your finances. If you made any large transfers of money in the five years prior, they may deny you regardless of why you made the transfer. 

(Some people will attempt to move money to a loved one just for the sake of making their finances look appropriate to qualify for Medicaid. That move will likely be discovered in an audit and they end up having to pay out of pocket for services received.) 

I’m sure there are other restrictions and disqualifying events of which I’m not aware. But if that’s what you’re looking to face in your future, you owe it to yourself to start learning and preparing now. Read the eligibility policy for Medicaid. Reach out to your Area Agencies on Aging. Don’t let avoidance of this be the gap into which you fall. 

Thank you for reading! What questions do you have? Do you have any suggestions? Did this bring up any stories you want to share, or has this blog helped you in any way? Please reach out to me through the contact page or leave a comment below. I’d love to hear from you!