Financing long-term care should be approached with the same through and preparation as any other major investment.

Before signing a contract with a nursing home, you should:

1. Obtain, in writing, what your basic charges will be.
2. Discuss the fee structure with the facility administrator.
3. Ask about daily rates and extra charges for services not covered.
4. Ask about secondary insurance billing responsibilities (will you need to submit them, or does the nursing home?)
5. Ask about Veteran's benefits and Medicare/Medicaid coverage.
6. Find out if advanced payments will be returned if the resident leaves the home.
7. Make sure you have copies of all payment arrangements.

It is important that you know the government provides little financial assistance for nursing home care unless the patient is impoverished and qualifies for Medicaid. Most health insurance policies do not cover the costs of long-term care. You should consult your facility administrator or a financial consultant to determine how you and/or your loved one will cover the costs.

Options for paying for nursing home care:

• Personal funds (private pay)
• Social Security payments
• Medicare/Medicaid
• Assets in escrow or as an endowment
• Assistance from private organizations (veteran's groups, trade unions, etc.)
• Medigap policy (Medicare Supplement Insurance)
• Long-term care insurance

Because the cost of long-term care can be quite expensive, it is important to plan ahead. Unfortunately many people unexpectedly end up spending their life savings paying for long-term care.

Medicare

Medicare is the health insurance program for the elderly and is administered by the U.S. Department of Health and Human Services. It is a federal program for:

1. People age 65 and over; or
2. People disabled for at least two years; or
3. People suffering from chronic kidney disease

Under certain conditions, Medicare covers the first 20 days of care in a skilled nursing facility. For the 21st through the 100th days, the beneficiary must share the cost of care by paying a nationally set rate, which changes yearly. In 2002, coinsurance payment was just over $101 per day.

Medicaid

Medicaid is the federal and state financed assistance program for needy and low-income individuals of all ages. Sates design their own programs within broad federal guidelines. To get Medicaid help for nursing home care, the assets of the person needing this help must be $1,500 or less (an unmarried individual). All Medicaid recipients must be approved by the Indiana Pre-Admission Screening Process to receive nursing home coverage.

Long-term care insurance

Long-term care insurance offers a more viable solution to paying for long-term care costs while preserving personal savings. However, due to lack of public awareness about long-term care and who pays for it, long-term care insurance, visit the Indiana Department of Insurance website.