In last week’s blog post, we discussed how to make the right decision when it comes to choosing senior care for your loved one. It can be challenging to determine the level of care your loved one needs and then actually find the right fit within that level of care. But what’s often more cumbersome than figuring out what type of senior care your loved one needs is actually figuring out how to pay for it. That alone can keep many families from researching into the options available to them until it’s done out of necessity and not beforehand out of a desire to be prepared.
It’s no secret that senior care can be expensive, which is another reason many families put off exploring options. We’ve discussed in various other blog posts about the importance of being prepared before there’s an actual need and having a baseline of knowledge so you’re not thrown into the deep end during a crisis with nothing to cling to. Having a general knowledge and understanding of the world of senior care and things to prepare for will help immensely when the time comes for your senior loved ones to transition into senior care.
Most of the time, one of the first questions families ask when looking for senior care is, "How are we going to pay for this?" The answer isn't always straightforward or easy to determine at first glance. Sometimes, it’ll take some research and maybe even some expert guidance. Luckily, Senior Industry Services is here to help!
We understand that every family’s financial situation is different, and there isn’t one simple solution that works for everyone. There are several ways to navigate paying for senior care, all of which are dependent on your loved one’s circumstances.
In one of our previous blog posts, we discussed where to start when navigating paying for senior care. In this post, we highlighted the importance of understanding what resources are available to you so you have a good base knowledge of information before making any major decisions. Oftentimes, families are surprised to learn they may qualify for assistance that they didn’t even know existed, or that some programs cover things they might not expect.
Here’s a simple overview of the most common ways families in Central Texas pay for senior care:
Private Pay
The reality is that most families begin by paying privately. This is not because there are or were no other ways to pay, but often just because families aren’t always aware of all the options available to them. Private payment is typically payment directly out of pocket from a savings account, retirement income, investments, proceeds from selling a home, or family contributions. This is the most common path for payment. One other option within private pay is split payment, which involves sharing the care expenses amongst family members to equally carry the financial load.
One benefit to private pay is that it can be used for any type of care, including:
- Home care
- Assisted living
- Memory care
- Independent living services
- Nursing homes
The downside to this is, of course, that it’s directly out of pocket and thus usually more expensive. This option will give you a lot of flexibility for choices and options of senior care, but it will likely be more pricey than if you were able to utilize other payment methods.
Long-Term Care Insurance (LTC)
If your loved one purchased a Long-Term Care Insurance policy years ago, it may help cover the cost of care. According to BubbieCare, an in-home care provider, further explains that long-term care insurance is a policy specifically designed to cover custodial care costs. The earlier it is purchased, the more coverage it typically provides. According to the Texas Department of Insurance, Long-term care is different from traditional medical care, which tries to treat or cure illnesses. Long-term care helps with routine daily activities, such as eating, getting around, and bathing. It also can help if you need supervision, protection, or reminders to take medicine. Their long-term care insurance guide further states that Long-term care is a type of service you might need if you can’t care for yourself because of an illness, disability, or Alzheimer’s disease. It helps with routine daily activities like eating, getting around, and bathing. It can also help if you need someone to look after you or need reminders to take medicine.
The guide also highlights key aspects of the insurance, such as the type of care covered by the insurance, which includes:
- Care in a nursing home or assisted living center.
- Nursing care and other health services at your home.
- Nursing, therapeutic care, social and educational activities, and supervision at an adult day care facility.
- Other services. Some policies pay for hospice care, respite care (care to allow time off for family members who are caregivers), care after a hospital stay, help with household chores, or caregiver training for family members.
Every policy is different and will have different coverage. Most policies have eligibility requirements, waiting periods, and daily or monthly benefit limits. Reviewing the policy early can help avoid surprises later.
Here’s a general overview of the types of long-term care insurance policies from the Texas Department of Insurance:
Individual policies:
Most long-term care insurance policies are individual policies. You buy individual policies directly from insurance companies.
Group policies:
Some groups offer long-term care policies to their members. Your employer might offer a group long-term care policy to its employees, for example. Group policies rarely require a medical exam. Some employers offer coverage to retirees and family members. Family members usually must take a medical exam to get coverage.
Insurance companies must let you keep your coverage after you leave the group or until they cancel the group plan. You can continue your coverage or change it to another long-term care insurance policy.
Federal and state government policies:
Federal and U.S. Postal Service employees and retirees, active and retired service members, and their dependents can get long-term care insurance through the Federal Long-Term Care Insurance Program. The premiums are usually lower than the premiums for an individual policy.
If you or a family member is a state or public employee or retiree, you might be able to buy long-term care insurance under a state government program. In Texas, the Teacher Retirement System and several university systems offer group plans.
Association policies:
Some associations offer long-term care insurance to their members. Policies sold through associations usually must let members keep their coverage after quitting the association. You usually must have a medical exam to get an association policy. Don’t join an association just to buy an insurance policy. The association might decide to stop offering the policy.
Texas Long-Term Care Partnership policies:
The Long-Term Care Partnership is a collaboration between private insurance companies, agents, and the state of Texas. It helps Texans meet their long-term care needs. Partnership policies have benefits, features, and consumer protections that aren’t available with other long-term care policies.
Features include “dollar-for-dollar” asset protection, inflation protection, and coverage that follows you to another state if you move. Dollar-for-dollar asset protection means Medicaid will disregard one dollar of your assets for every dollar your policy pays in benefits. This can help you qualify for Medicaid even if your assets are above the eligibility limits. These assets are also protected from Medicaid liens and recoveries after you die.
Partnership policies are tax-qualified. You might be able to deduct part of the premium from your taxes as a medical expense. And the benefits you get from a partnership policy usually aren’t taxable.
VA Benefits
Veterans and surviving spouses may qualify for programs from the U.S. Department of Veterans Affairs that help offset the cost of long-term care. One of the most commonly used programs is Aid & Attendance, a pension benefit designed for veterans who need help with activities of daily living (ADLs) such as bathing, using the restroom, and dressing.
However, not every veteran automatically qualifies. Eligibility depends on factors such as military service history, health needs, income, asset limits, and the specific benefit being requested. VA benefits may help pay for care at home, adult day health centers and programs, or certain long-term care services, but they typically do not simply pay the full cost of assisted living for everyone.
If your loved one served in the military, it's worth asking whether they may qualify. The application process may also require detailed documentation of these things. Because of this, working with professionals to help navigate eligibility and applications is recommended.
The VA’s long-term care services include:
- 24/7 nursing and medical care
- Physical therapy
- Help with daily tasks (like bathing, dressing, making meals, and taking medicine)
- Comfort care and help with managing pain
- Support for caregivers who may need skilled help or a break so they can work, travel, or run errands
This care can be delivered in many different settings, some run by the VA and others run by state or community organizations, including the following:
- Nursing homes
- Assisted-living centers
- Memory care communities
- In-home care services
- Skilled nursing care
Medicaid
Medicaid is often misunderstood. Many might assume Medicaid pays for all senior care, but that's usually not the case. Medicaid is designed for individuals who meet both financial and medical eligibility requirements. In Texas, Medicaid may help pay for nursing home care and certain home and community-based services through waiver programs, but qualifying can take time and requires an application process.
While Medicare can often help with short-term medical needs, Medicaid is one of the primary programs that can help pay for long-term care when other financial resources are limited. However, there are strict financial and medical requirements that must be met in order to receive this coverage, which include the following:
General Eligibility:
- Be 65 or older, OR under 65 with a permanent disability, OR blind
AND - Be a U.S. citizen or meet certain immigration rules, and be a resident of the state where you apply
There are many other strict financial and medical requirements to determine eligibility, including things like your income and assets, and whether a spouse is still living at home. Because eligibility rules are complex, families often benefit from speaking with someone who understands the process before making financial decisions. If you or someone you know needs some extra help and guidance, we partner with and are powered by Oasis Senior Advisors of Austin and Central Texas. Feel free to reach out and contact someone at Oasis to chat about what options might be best for you to pay for senior care.
Medicaid for the elderly and people with disabilities covers health care services, including the following:
- Regular checkups with the doctor
- Medicine and vaccines
- Hospital care and services
- X-rays and lab tests
- Vision and hearing care
- Access to medical specialists and mental health care
- Home care and personal care
- Nursing home care
Many Families Use More Than One Option
It's common to combine resources.
For example, a family might start by paying privately and then use long-term care insurance benefits once they’re activated. They may also apply for VA benefits, if eligible, and then transition to Medicaid later if the qualifications are met.
Every situation is different, which is why planning early can make the process much less stressful. Integrating multiple payment methods is often a great way to ensure coverage and reduced costs for care. However, combining payment forms can also complicate eligibility for certain payment assistance programs, so it’s best to consult with a financial planner and senior care expert to help you make the right choices for both your loved one and finances.
You don’t have to figure it out alone! Trying to understand senior care funding while also caring for a loved one can feel overwhelming, but luckily, you don’t have to!
At Senior Industry Services, we help families throughout Central Texas understand their options, connect with trusted professionals, and navigate the next steps alongside them to help them proceed with confidence. Whether you're just beginning your search or trying to understand which payment options may apply, we're here to help you make informed decisions.
Written for Senior Industry Services by Lauren Hope Bartling
References:
BubbieCare® — modern in-home care | serving Texas. https://www.bubbiecare.com/
Long-term care insurance guide. https://www.tdi.texas.gov/pubs/consumer/cb032.html
Nursing homes, assisted living, and Home Health Care | Veterans Affairs. https://www.va.gov/health-care/about-va-health-benefits/long-term-care/
Paying for long-term care | national institute on aging. https://www.nia.nih.gov/health/long-term-care/paying-long-term-care
Paying for long-term care | texas law help. https://texaslawhelp.org/article/paying-for-long-term-care
Texas. Medicaid. (n.d.). https://www.medicaid.gov/state-overviews/stateprofile.html?state=texas
Veterans Affairs. Go to VA.gov. (2012, January 29). https://www.va.gov/geriatrics/pages/Medicaid_Benefits_And_Long_Term_Care.asp