Each individual’s financial situation is unique, and decisions are best made after consultation with an accountant or financial advisor. The following information is designed only to provide general guidelines.

The cost of long-term care represents a significant financial investment. Since some studies indicate that 40% of those over age 65 will receive some form of long-term care services, understanding the financing options will be helpful once the need arises.

• Personal resources - Because of the limitations of other payor sources, your own savings and assets are the first source of funding. Even if other sources of funding are available, they may not cover all the costs associated with your stay in the facility.



• Medicare - Medicare covers nursing facility services only to the extent that a beneficiary can recover from an acute illness or injury, and then only for a limited period of time. Services must be in a skilled nursing facility. The patient must have spent at least 3 consecutive days in a hospital, must be admitted to the nursing facility within 30 days of discharge from the hospital, and must be eligible for skilled nursing care or rehabilitation services, as certified by a physician. The maximum benefit period is up to 100 days, with Medicare covering the first 20 days of care. From the 21st to the 100th day there is a coinsurance paid by the patient, or the patient secondary insurance  (currently $119/day). Additional information is available from the facility or from your nearest Social Security office.



• Medicaid - Medicaid is designed to provide assistance to low-income people. It is based on financial need, so Medicaid applications ask for income and expense information. There is a review of assets covering the previous 3 years, so that there is not a fraudulent attempt to channel assets to another person. If a person is approved, Medicaid will pay for the nursing home costs, though some personal expenses are not covered. There are guidelines in place to prevent a spouse who may not be living in the nursing home to avoid becoming impoverished. In Michigan, the Family Independence Agency administers the Medicaid program.



• Private Insurance - A variety of long-term care insurance programs are available, and, while premiums and benefits vary, costs will certainly be lower the earlier a person enrolls. There are also possible tax benefits for costs associated with premiums and long term care expenses. Key questions to ask when evaluating policies include:
        1.   How long is the deductible period (the period you pay privately before
               the benefits begin)?
        2.   Are there clauses or exclusions related to pre-existing conditions?
        3.   Are mental health conditions (e.g. Alzheimer’s) covered?
        4.   Are there periodic adjustments for inflation?
        5.   Do premiums increase as the insured ages?