Paying for assisted living can seem complex, especially when there are multiple methods available. This article aims to demystify four common payment methods: Medicare, Medicaid, long-term care insurance, and private pay. By understanding these options, you can make informed decisions about the best way to fund assisted living care in Texas.
Medicare
Medicare is a federal health insurance program primarily for individuals aged 65 and older. It also covers some younger people with disabilities and individuals with end-stage renal disease. Medicare is divided into several parts:
- Part A covers hospital insurance
- Part B covers medical insurance
- Part C (Medicare Advantage) offers an alternative way to receive Medicare benefits
- Part D covers prescription drug costs
When it comes to assisted living, Medicare typically doesn’t cover the cost of the living facility itself. However, it does cover specific health care services provided in an assisted living setting.
For example, if a resident in an assisted living facility needs physical therapy, Medicare Part B may cover these costs. Similarly, prescription medications might be covered under Medicare Part D. However, the room and board at the assisted living facility would not be covered by Medicare.
Medicaid
Medicaid is a joint federal and state program that helps with medical costs for some people with limited income and resources. Unlike Medicare, Medicaid can pay for the majority of costs associated with assisted living facilities, but this depends on the state’s specific policies.
In Texas, the Medicaid program that can help pay for assisted living is the STAR+PLUS program. For eligible individuals, the STAR+PLUS program provides a managed care system for basic health services and long-term services, including assisted living. However, it requires the Assisted Living provider to be enrolled in the STAR+PLUS program as well and not many providers enroll due to the limited reimbursement that is provided under this program.
For instance, if an individual qualifies for Medicaid in Texas, is eligible for the STAR+PLUS program and the Assisted Living community is enrolled in the program, the costs of living in an assisted living facility could be covered, including room, board, and necessary health services. It’s important to note that the person must meet certain income and resource requirements to qualify and due to the limited reimbursements, the quality of care can be quite low.
Long-Term Care Insurance
Long-term care insurance is a type of insurance policy that is designed to cover long-term services and supports, including personal and custodial care in various settings such as your home, a community organization, or other facility.
This type of insurance can be used to pay for assisted living. The coverage depends on the specific terms of the policy, such as the daily benefit amount, benefit period, and any elimination period (a waiting period before the benefits begin).
For example, an individual might have a long-term care insurance policy that pays a daily benefit of $150 for assisted living care for a maximum of four years. After a waiting period of 90 days, the policy would begin to pay out benefits that could be used toward the cost of assisted living.
Private Pay
Private pay refers to using personal funds to cover the cost of assisted living. This could include savings, retirement funds, income from stocks and bonds, or the sale of a home.
As an example, an individual might use their retirement savings or proceeds from selling their home to pay for an assisted living facility. The cost of assisted living in Texas can vary widely depending on the location, size of the living space, services provided, and other factors.
Understanding your payment options is crucial when planning for assisted living care in Texas. Each option has its own benefits and restrictions, and the best choice depends on the individual’s financial situation, health status, and personal preferences. Always consider consulting with a financial advisor or elder law attorney to help navigate these complex decisions.