by Thomas D. Begley, Jr., CELA

There are five ways to pay for long-term care:

• Private Pay. The patient or resident simply signs a monthly check.

• Long-Term Care Insurance. Long-term care insurance is the best way to pay for long-term care, but only about 8% of the American population has long-term care insurance. Once someone has a diagnosis of Alzheimer’s, they will no longer be medically eligible for long-term care insurance. Financial Advisors and Attorneys should encourage their clients to purchase long-term care insurance while they are in their 50s. The premiums are less expensive and the client is likely to pass medical underwriting at that time.

• Medicare. Medicare pays very little for Alzheimer’s patients because Medicare only pays for skilled care. Generally, Alzheimer’s patients only require custodial care.

• Veterans Benefits. Certain Veterans and spouses of those Veterans are eligible for Veterans benefits that include federal VA nursing homes, Veterans Aid and Attendance benefits, and state VA benefits. Veterans Aid and Attendance is a monthly check that varies depending on family situation and financial situation as well as the type of service performed by the Veteran.

• Medicaid pays for 40% of long-term care in the United States. Basically, there are four tests for Medicaid eligibility: (1) a medical test, (2) income, (3) transfer of asset test, and (4) resource limits. There is a five-year lookback for Medicaid transfer of assets, so planning should be done long in advance.

The Six Ways to Pay for Long-term Care

1) Private pay.  Pay out of your own assets for long-term care.
2) Kids pay.  Typically the children don’t pay financially, but the they pay in term of their time.
3) Medicare.  Medicare only pays short term rehab and hospice, not long-term care costs.
4) Long-Term Care Insurance.  Long-term care insurance is a tool that can help pay long-term care costs, but it is certainly not a magic wand or the only answer.
5) VA Benefits.  We’ll talk more about this more…
6) Medicaid.  Medicaid pays for nursing home level care only, with harsh asset qualification penalties.

Michigan VA Benefits For Long-term Care

If a veteran needs long-term care, either home care, assisted living or nursing home care, there is a little known resource called the non-service connected VA Benefit that can help pay that cost of care.

VA Benefits for Home Care in Michigan

Home care in Michigan can easily run over $3,000 per month when you’re buying a couple hours per day a couple times per week.  The VA Benefit can easily come in and help off-set some of that cost of care.

Qualification for Michigan VA Benefits

There are five requirements to qualify for the Aid and Attendance Veterans Benefit.

1. The Veteran must have served 90 days active duty.
2. One of those days must have been during a period of conflict.
3. Cannot be dishonorably discharged.
4. Long-term Care Costs must exceed Social Security and Pension.
5. Asset Test

The benefit is really that straight forward.  If you’re able to overcome each of the requirements then you can bring in up to $2,120 per month tax free.

If you would like a free easy action plan to secure your VA Benefits, then contact our office for the VA Benefits Action Plan.

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