As revealed in first part of this article about paying for your retirement, costs for assisted living are increasing. The 2009 national median monthly rate for an assisted living apartment is nearly $3,000. In addition, over the past five years, the cost of assisted living has risen nearly 5% each year. Clearly, paying for your retirement will require planning and resources. In this second installment, details regarding Veterans Administration benefits, Medicare, and Medicaid will be provided.
Veterans Administration Aid and Attendance Benefits
The VA covers assisted living care for veterans and their spouses. Veterans who have served at least 90 days on active duty and at least one day during wartime may qualify for this benefit, commonly referred to as “Aid and Attendance.” This program, run by the Veterans Administration, may pay a maximum benefit of $1,949/month for married veterans and $1,644 per month for single veterans. The surviving spouse of a qualified veteran may receive up to $1,065/month. The income limit for pension benefits is $19,736 per year for a veteran with no dependents; however, this limit can be offset by the cost of out-of-pocket expenses incurred by the veteran including the cost of assisted living care. The communities of Retirement Unlimited, Inc. have more information about this benefit including a DVD that takes you step by step through the paper work, which you may borrow from the Communities.
Medicare is a health insurance program, sponsored by the government, for people age 65 or older, for people under the age of 65 who have certain disabilities, and for people of all ages with End-Stage Renal Disease. Medicare does not provide a comprehensive long-term care component and generally does not cover retirement and assisted living costs. However, Medicare may pay for services such as rehabilitation therapies contracted through an agency and provided to the person at the assisted living or retirement community.
Medicare has two parts. The first is Part A or Hospital Insurance. This is the part that most people do not have to pay for to receive coverage. The second part of Medicare is called Part B or Medical Insurance. Most people do pay for coverage under this part of Medicare. Part A provides limited nursing home coverage. If a participant has a three-day qualifying hospital event, Medicare Part A will fully cover the first 20 days of nursing home care. From the 21st through the 100th day, Medicare pays only part of the cost of the stay. The insured must pay a daily co-insurance or co-pay amount which changes yearly. If you choose to participate and pay for Medicare Part B insurance, it will cover a portion of the services received from your doctor. If you have used up your 100 days of Medicare Part A eligibility, Medicare Part B will cover a portion of the services that you receive while in a nursing home. Under Part B, you pay an annual premium and a deductible and then Medicare will pay 80% of the reasonable charges for covered services in a nursing home. For more detailed information on Medicare eligibility, you can go to www.medicare.gov.
Medicaid is available only to people with limited incomes who meet certain eligibility requirements. Medicaid does not pay money to you. Instead, it sends payments directly to your health care providers. Usually a person will be eligible for Medicaid when savings falls below $2,000, although this amount varies by state. Some things are not counted against this savings limit including the value of your home, a necessary car, clothing, household goods or a burial plot. Since Medicaid is a state-run program, different states have different specific eligibility requirements. For example, the Commonwealth of Virginia has an online Medicaid application through the Department of Social Services. If you are a Virginia resident, you can access this application and apply online by going to www.easyacces.virginia.gov . You will be asked to verify financial resources including checking and savings accounts, stocks, property, and insurance. Be aware, however, that it takes between 45 and 90 days in Virginia to process the application to qualify for assistance. You will also need to show proof of identity, such as a driver’s license, your citizenship papers, and/or social security number. The state will then match your information against federal, state and local records including the Virginia Employment Commission, Department of Motor Vehicles, the IRS, U.S. Citizenship and Immigration Services and the Social Security Administration.
People who meet all Medicaid eligibility requirements except income may be placed on what is referred to as “spend down.” If your income is higher than the limit, but less than your medical expenses, you may be eligible for Medicaid for a limited period of time.
Some assisted living facilities do accept Medicaid payment for a person’s stay. When visiting a facility, you should ask about the availability of Medicaid waivers. If the facility is a participating Medicaid provider, then they must accept the amount that Medicaid reimburses for your stay. In this situation, you would not be billed an additional amount for your stay.
Navigating the financial waters of paying for your retirement can be daunting. However, with information, resources, and a little due diligence, you can have the retirement that you want.