Paying for long-term care
Page | 1 | 2 | 3 |

Some states offer Medicaid waiver
While most states have waiver programs that allow at least some Medicaid funding for assisted living, Alabama, Kentucky, Louisiana, Pennsylvania and South Carolina do not have such coverage, although Pennsylvania has state-funded Supplemental Security Income for assisted living, according to the NCAL's March 2008 Assisted Living State Regulatory Review. The District of Columbia is considering a waiver policy.

Unlike nursing home care, the cost of assisted living is only partially covered under Medicaid, and not all facilities accept Medicaid patients. Some state programs cover only certain types of costs and medical conditions.

"Room-and-board costs are not covered, and that's a big chunk of the costs," says Cameron. "It's the service component that primarily is covered by Medicaid in assisted living. For example, if someone has a nurse's aide with them for a large number of hours, that would be covered, or if they have medication management services, those types of things would be covered."

Veterans are eligible for assisted living
The Department of Veterans Affairs, or VA, covers assisted living care for veterans and spouses of veterans who have served at least 90 days on active duty and at least one day during wartime. Applicants must meet a medical qualification test, but their conditions don't need to be related to military service. Called the Non-Service Connected Improved Pension Benefit with Aid and Attendance, or "aid and attendance" for short, this program pays a maximum benefit of $1,949 a month for married veterans, $1,644 for single veterans and $1,056 for a surviving spouse.

The VA's income limit for pension benefits -- $19,736 a year for a veteran with no dependents who needs aid and attendance -- is offset by the cost of out-of-pocket medical expenses, which may include assisted living care. So if your income is $25,000 and your medical expenses -- including assisted living care -- are $10,000, the VA counts only $15,000 worth of income toward eligibility.

But less than a third of those eligible for this benefit actually receive it, according to Cheryl Chapman Henderson, an attorney and veterans benefits consultant in College Park, Md. Veterans often are told they have too many assets to qualify for the program, she says.

"They're not told that they could make some adjustments and reallocation of their assets without being penalized and qualify," she says. "Let's say the veteran has been cared for by an adult child. He could gift assets to that child, who could hold those assets ...  for the benefit of the parent. If veterans can get the assets out of their name, they may not be over the asset (threshold)."

Planning for assisted living care can be challenging emotionally as well as financially. "One of the things that we don't do well as a society is educating and training people to plan, not for their retirement years, but for the last years of their life," Kyllo says. "We don't like talking about that, so we avoid those kinds of issues."

But if most would prefer to skip the discussion, there is one reality they cannot escape.

"About 70 percent of the people who turn 65 in a given year will need long-term care services during the remaining years of their lives," Kyllo says.

Sonya Stinson is a freelance writer from New Orleans.

Read more of Bankrate's insurance stories.