The Elder Law Forum

The Elder Law Forum by Professor Michael Myers Editor's Note: The Elder Law Forum is a public service of the University of South Dakota School of Law, an extension of the SENIOR LEGAL HOTLINE available at no cost to persons 60 and older at 605-677-6343 and during regular business hours. The Elder Law Forum delivers information and educational material by radio, a weekly newspaper column, and Law School research papers placed on the USD School of Law Web site. Professor Myers teaches Elder Law at the School of Law.

Older Americans

at financial risk

for chronic illness

Medicare does not cover custodial nursing home care! Again: Medicare does not cover custodial nursing home care! It bears repeating because many people believe it does. They confuse "skilled nursing care," which is covered by Medicare, with "nursing home care," which is not.

Remember, Medicare, in the most general sense, is for the "old," persons over 65 or disabled. Medicaid, on the other hand, is for the "poor," persons of any age who meet the federal test for poverty.

This is important to remember because the majority of South Dakotans residing in nursing homes rely upon Medicaid to fund their room, board and medical care needs in a long-term care setting.

The 75-, 80-, or 85-year-old who enters a long-term care facility with assets must first become "poor" before becoming eligible for Medicaid support. And that means really poor: assets of about $2,000; a burial fund of about $1,500 (or prepaid burial policy), and certain assets, including a car, jewelry, and clothing. The home is exempt as long as the spouse or a disabled or blind child resides there. After that it will be taken by the state's recovery program.

When enacting the 1965 Medicare and Medicaid programs Congress had a consistent rationale: It was unfair, it believed, to allow persons who had been responsible, taxpaying citizens during a lifetime of hard work to be forced into a state of "poverty" by an event they had no control over, e.g., the onset of an "acute" illness like cancer, or "chronic" illness like brittle diabetes or congestive heart failure.

Ultimately, Congress provided for the acute side of the risk of getting old. Medicare will pay for a cardiac spell of illness requiring a coronary bypass procedure costing $110,000, or a series of chemotherapy sessions costing $80,000, but it will not pay for a one-year nursing home stay costing $40,000.

When Congress looked at the long-range cost of custodial care it balked, leaving those who spent their lifetime paying taxes, mowing grass, and educating their children at personal risk for a disability requiring long-term care.

Remember, Medicare is for the "old" and persons disabled under Social Security. Medicaid is reserved for those entering a state of federally-defined poverty. Also, remember that while Medicare pays for "skilled nursing" (rehabilitative care such as physical or occupational therapy) for short periods of time (20 days without a substantial co-payment), it does not pay for the overwhelming amount of nursing home care, which is considered "custodial."

And, make certain that when buying long-term care insurance, you know the difference.

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