Medicaid Long Term Care

Long-Term Care Services

Medicaid is a significant source of financing for long-term care. The elderly and disabled make up one-quarter of the Medicaid population but account for about 70 percent of program spending. While more than two-thirds of Medicaid spending for long-term care is on institutional services, home and community-based services (HCBS) waivers enable states to deliver community-based care. In fact, more Medicaid beneficiaries now receive community-based services than institutional services.

All state Medicaid programs are required to cover either nursing facility care or home health care for people who qualify for nursing facility care. Medicaid’s qualifications for home health care are far less strict than Medicare’s-beneficiaries do not have to qualify for nursing facility care or to have been discharged from a hospital or nursing home to receive care. (This is an important contrast between the two programs of which you should be aware.) State Medicaid programs also have the option of covering other services, including case management services, personal care services, prescription drugs, respiratory care services, private duty nursing services, hospice care, PACE services (addressed below), and home and community-based services provided through waivers (see next section).

Home And Community-Based Services

Although most long-term care spending is for institutional care, Medicaid is shifting the delivery of services to HCBS. Beginning in 2007, the DRA allowed states to provide certain home and community-based services without first getting a waiver.

Medicaid’s payments for HCBS are often referred to as section 1915 waivers, after the section of the Social Security law that approves them. States that employ section 1915 waivers widen the options for applicants who qualify for institutionalized care. Section 1915 allows funds for such care to be applied to services provided in a home setting, rather than in an institution.

Another Medicaid waiver program also offers flexibility to states with respect to Medicaid long-term care services. They are called section 1115 demonstration waivers, after the section of the Social Security Act that authorizes them. Section 1115 allows applicants who are disabled to receive money directly from Medicaid to purchase long-term health services themselves. The waiver offers an option from the traditional method of Medicaid administration, where money passed directly to a care provider or institution and patients had fewer service options.

States provide consumer-directed services through section 1115 or 1915 waivers. The section 1115 waiver gives states more flexibility than section 1915. Under section 1115, states can provide services even to individuals who with which they can purchase services directly. In contrast, under section 1915, states can enroll only individuals who require institutional care, and they cannot vie cash directly to beneficiaries.

Program Of All-Inclusive Care For The Elderly

The Program of All-Inclusive Care for the Elderly (PACE) is a popular option for delivering HCBS to frail seniors. PACE permits participants to live at home and receive services. PACE programs are not available in every state, so check with your state Medicaid office.

To qualify for PACE, a person must be 55 years of age or older, live in a PACE service area, and be certified by the state to need nursing home-level care.

The typical PACE participant is very similar to the average nursing home resident. On average, the participant is 80 years old, has 7.9 medical conditions and is limited in approximately three activities of daily living. Forty-nine percent of PACE participants have been diagnosed with dementia. Despite a high level of care needs, more than 90 percent of PACE participants are able to continue to live in the community. (2008; National PACE Association, www.npaonline.org).

PACE programs are not limited to services reimbursable under Medicare and Medicaid. They have the flexibility to deliver all services participants need, including social services. Here are some testimonials given to the National PACE Association by family members of PACE enrollees:

PACE takes care of all my husband’s medical needs. In or out of the hospital, they step up to the plate when they are needed.

When we enrolled in PACE, the staff came into my mother’s home, putting in grab bars where they needed to and outfitting the bathroom for her. PACE provided the physical things that she need to keep living on her own.

Before we found PACE, our family was really struggling with how to best honor our mother’s wishes while at the same time meeting her needs. It was a real challenge. PACE has made a huge difference in our being able to do that.

PACE is able to provide the entire continuum of care and services to seniors with chronic care needs, while they live independently in their homes for as long as possible. Care and services include:

  • Adult day care that offers nursing; physical, occupational, and recreational therapies; meals; nutritional counseling; social work and personal care;

  • Medical care provided by a PACE physician familiar with the history, needs, and preferences of each participant;

  • Home health and personal care visits (but not hourly work shifts);

  • all necessary prescription drugs;

  • social services;

  • medical specialists in areas such as audiology, dentistry, optometry, podiatry, and speech therapy;

  • respite care;

  • hospital and nursing home care when necessary.

Many people believe that Medicare will cover long-term care costs. This is a widespread and dangerous misperception. In truth, Medicare benefits for long-term care are very limited. Medicare pays only for skilled are that is deemed “medically necessary.” It does not cover personal care required by most seniors with chronic, custodial care needs. In fact, most typical nursing home admissions either do not require the level of skilled care demanded by Medicare or exceed the time limits for Medicare coverage, leaving seniors and their families searching for other funding sources for ongoing coverage of long-term care costs.

Using Medicaid To Pay For Long-Term Care

Projections of the percentage of our population that will require nursing home use during their lifetime vary from 39 to 49 percent (www.cms.gov). For those needing nursing home care, it is highly likely that they will eventually have to rely on Medicaid.

Medicaid Planning – A Controversial Debate

Seniors should have a plan for how they are going to pay for long-term care if the need occurs. Many seniors have questions about applying for Medicaid benefits to cover LTC costs.

Seniors forced to take such measures may have no other option-they have neither the income nor the assets to purchase long-term care insurance or pay the costs of long-term care on their own. Or, they may be uninsurable. Others wish to avoid accumulating massive medical bills that will impoverish a spouse or consume an estate they hope to pass on to their heirs.

You have probably heard the term Medicaid planning. This strategy helps seniors manage their assets and income at the same time that they are able to qualify for Medicaid if needed. However, Medicaid “planning” is actually a misnomer, as most seniors do not plan to go on Medicaid, but are faced with an imminent care need and have no other choice. Medicaid planning is most often reactive, initiated in a crisis mode after care has already begun or following the diagnosis of a serious, progressive disease.

Medicaid planning is a controversial topic. Federal and state governments have made it increasingly difficult to transfer assets in order to qualify for Medicaid. The 2005 DRA specifically addressed handling of assets. Many believe that this tightening of the purse strings is insensitive to seniors. Their contention is that the government must address the financial devastation that faces seniors who need long-term care but lack necessary resources. To support their argument, they point to the wealthy, who easily pay their own long-term care costs in the environment of their choice, and to the poor, who easily qualify for state assistance.

Those who believe that the government is insensitive say that the hard working middle class must endure impoverishment before they can receive federal assistance with their long-term care costs. The argument is that the small “nest egg” that these middle-class seniors saved to provide for a spouse or to help their adult children can be consumed by long-term care costs in a matter of months.

The other side of the argument is that Medicaid is a means-tested program designed as a safety net for individuals with low income and limited resources and should be used when no other resources exist. Those who support this position would point out that persons with $ 500,000 in home equity have a significant asset to use for their care and therefore are not impoverished.

The information above is reprinted from Working with Seniors: Health, Financial and Social Issues with permission from Society of Certified Senior Advisors® . Copyright © 2009. All rights reserved. www.csa.us