By Mia Poliquin Pross, Esq.

It’s no secret – long term care is incredibly expensive. The average cost of nursing home care in Maine is about $10,000 per month. How do you pay for that expense if or when it’s needed? There are generally only a handful of payment sources, and there are many misconceptions about how they work.

First, many people assume that Medicare will cover nursing home care. Medicare and supplement plans typically only cover rehabilitation services in a long term care facility for a short period of time (about three months). If you no longer qualify for rehab and need to stay in a facility due to an ongoing or terminal condition (or simply deteriorating health and mobility due to old age), that won’t be covered by Medicare plans.

Second, the Veteran’s Administration covers long term care for a very limited segment of veterans with a service-connected disability who meet certain criteria. Also, a veteran may be eligible for placement in a non-profit Maine Veterans’ Home, but that doesn’t necessarily mean that the cost will be paid for by the VA. If you think you may qualify for VA benefits, you should seek confirmation from your local Veterans’ Services Office to make sure.

Third, long term care insurance policies cover nursing home care, but many people do not have this insurance due to the high cost of premiums. Also, even if you have this insurance, there can be gaps in the coverage. You should review the details of your policy and understand the elimination period, maximum payout, and whether you have a rider that increases your benefit as the cost of care increases.

Fourth, there’s paying for care out of pocket. At about $10,000 per month, even someone with substantial means will rapidly begin to deplete their estate. This is what elderly folks seem to worry about the most. They worry that if they have a spouse, the spouse will be impoverished. If they have children, they worry that there will be nothing left to leave as a legacy gift for their kids.

And finally, there’s MaineCare, which is Maine’s Medicaid program. You have to meet asset and income guidelines for MaineCare and there are many rules to be aware of. Asset limits are different for single people versus married people, and they also vary based on the type of care you need. People are often worried about “losing their house” if they go on MaineCare, which generally refers to the estate recovery process, which is governed by another set of complicated rules. Also, giving away assets can make you ineligible for MaineCare coverage for a period of time.

The long term care system is complex. If you are concerned about how long term care needs will impact your financial well-being or that of your family, you should seek expert advice. There are planning strategies available to protect some assets for a spouse or family members, while still ensuring that your long term care needs will be met. It’s never too early to plan.

Originally published in Sun Journal Estate and Funeral Planning Guide, October, 2021