Coordinating Government Benefits

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Medicare was designed to cover basic medical needs, and little else. Medigap provides some additional coverage where Medicare leaves off, but many seniors rely far too heavily on Medicare and Medigap for their healthcare needs. Medicare and Medigap do not provide adequate coverage for an extended stay in a nursing home or skilled care facility. They provide only limited coverage for intermediate care provided at home, and no coverage for custodial care. To complete your coverage, most experts recommend combining Medicare and Medigap with a good long-term care insurance (LTCI) policy.

Coverage of skilled care
Skilled care is continuous around-the-clock care required to treat a medical condition. It is ordered by a doctor and is usually delivered by a skilled medical worker (e.g., a registered nurse or professional therapist). A treatment plan is established and supervised by a doctor.

Medicare
Medicare provides 100 percent coverage for the first 20 days in a skilled care facility, as long as certain conditions are met. Before moving into a skilled care facility, you must have spent at least 3 consecutive days in the hospital for the same condition; the hospital stay must be within 30 days of the time you go into the skilled care facility, and care must be provided in a certified facility. You are required to pay a daily co-payment (currently $99 per day) for the 21st through 100th day in a skilled care facility, but Medicare covers any expenses beyond this amount. Medicare provides no coverage beyond the 100th day.

Medigap
Most Medigap plans cover your daily co-payment for the 21st to 100th day of skilled care.

Long-term care insurance
Long-term care insurance is necessary for coverage beyond the 100th day of care in a skilled care facility.

Coverage of intermediate care
Intermediate care is care needed on an occasional basis (daily or a few times a week). It is provided by trained medical workers under the supervision of a doctor. Intermediate care is less specialized than skilled care.

Medicare
Certain types of intermediate care may be covered by Medicare, but only under specific conditions. For example, skilled nursing care, physical therapy, and speech therapy services provided in your home are covered by Medicare, but only if you are confined to your home and the services are ordered by a doctor. Intermediate care in a nursing facility is typically not covered by Medicare.

Medigap
Most Medigap policies provide an additional amount per at-home visit for intermediate care, but only if the services are ordered by a doctor as a follow-up to an injury or illness. Intermediate care received in a nursing facility is typically not covered by Medigap.

Long-term care insurance
Most long-term care policies provide coverage for intermediate care services provided in the home. Of course, the level of coverage depends on how the policy is structured. In addition, many long-term care policies cover care received in continuing care retirement communities, assisted-living centers, and adult day care.

Coverage of custodial care
Custodial care is provided to assist in performing the activities of daily living (such as bathing, eating, and dressing). It does not require a doctor's orders and can be performed by someone without professional medical skills.

Medicare
Medicare provides no coverage for custodial care, because these services are generally nonmedical in nature.

Long-term care insurance
If you are concerned about coverage for custodial care, a long-term care policy is probably appropriate. Many long-term care policies include coverage for personal care, light housekeeping, meal preparation, laundry services, and so on. Of course, the level of coverage depends on how you structure your policy. When you're reviewing a long-term care policy, keep in mind that 90 percent of all long-term care is custodial care.

Using Medicaid
Medicaid is a joint federal-state program providing medical assistance to low-income individuals who are aged, disabled, or blind. To qualify for Medicaid's long-term care benefits, you must be financially and medically eligible. Financial eligibility is based on the amount of your income and assets. Medical eligibility typically involves the need for skilled medical care (e.g., intravenous feeding, treatment of dressings), as well as other qualifications. In most states, intermediate care in a nursing facility will be subsidized, as will home health care and personal services.

Unfortunately, many individuals are forced to exhaust their life savings and assets in order to qualify for Medicaid, because they have no other way to pay for long-term care. A good long-term care policy can prevent this from happening.