Sunday, August 26th, 2012
Did you know that the state you live in could either cost you or save you tens of thousands of dollars if you ever need long-term health care services? If you didn’t know that, you need to keep reading.
Right now, several states and the federal government are in a big fight over Medicaid. Medicaid is a program for the poor, and you may think you will never need it. But many seniors are surprised to find themselves needing Medicaid to help pay for nursing home care. About 70 percent of people over the age of 65 will need some kind of long-term care services sooner or later. So, whether you are healthy now or suffer a devastating illness such as mesothelioma, the day may come when you will need some kind of long-term care.
And according to Genworth Financial’s 2012 Cost of Care Survey, the median cost for a semi-private room in a nursing home is $200 a day.
Doesn’t Medicare help? Not as much as you might assume. Medicare pays some nursing home costs for some people, but many conditions and limits apply. Overall Medicare is only paying about 10 percent of the nation’s nursing home bills. That’s why more than 6 million U.S. seniors receive Medicaid benefits, and care for seniors accounts for a quarter of Medicaid spending.
Because Medicaid is for people with limited financial assets, what often happens is that people in nursing homes deplete their own assets paying the bills until they qualify for Medicaid. That may not seem right, but that’s the system. And yes, you should look into getting a long-term care insurance policy. But right now most seniors don’t have long-term care insurance.
Unlike Medicare, Medicaid is a joint state-federal program. Each state runs its own Medicaid program, but the state programs must conform to federal guidelines in order to receive matching funds and grants from Washington. And right now, several states are rebelling against some new guidelines even though the federal government would pay nearly all of the cost.
The Affordable Care Act, known as “Obamacare,” provides for expanding the Medicaid program and raising eligibility requirements so that people don’t have to be as poor as before to qualify. This means that seniors could keep more of their life’s earnings when they sign up for Medicaid. The federal government will pay 100 percent of the cost of the expansion for three years, and 90 percent of the cost after that.
However, you might remember, the Supreme Court recently issued an opinion on the constitutionality of Obamacare. While the Court upheld the program as a whole, it did strike out much of the Medicaid language. As it stands now, a state may refuse to implement the Obamacare provision for expanding Medicaid, but in doing so the state forfeits the additional money it would have received from Washington to pay for the expansion.
As of this writing, the governors of five states have refused to expand their state’s Medicaid program. These states are Florida, South Carolina, Mississippi, Louisiana, and Texas. Five other states are leaning against expanding Medicaid, but have not made a final decision. These are New Jersey, Missouri, Iowa, Nebraska, and Nevada.
Some states and the District of Columbia will accept the expansion. These states are Washington, California, Minnesota, Illinois, Maryland, Delaware, Connecticut, Massachusetts, and Vermont. Rhode Island, Arkansas, and Oregon are leaning toward accepting the expansion. The remaining states have not yet indicated what they will do.
So, as it stands now, if you find that you need long-term health care, the state you live in could make a huge difference — tens of thousands of dollars difference — in how much of your own money you can keep before you qualify for Medicaid to help pay for it.