Aside from Medicare, Medicaid is usually the only source of financial aid when it comes to long term care costs, but eligibility is limited to the poor or those at great expense. The real scenario is, most elderly persons enter nursing homes as private pay clients, spend all their savings available, then seek medical assistance under Medicaid after their assets are exhausted.
And, since Medicaid eligibility depends on resources and no insurance, Medicaid provides assistance for the elderly only after they have spent all their assets and monthly income from social security or pensions to pay for cost of care. This has been the situation for most individuals in need of long term care nowadays.
Recent surveys revealed that an estimated 40 percent of nursing home residents had Medicaid as their primary source of payment at admission to the nursing home. Studies also confirm that about 20 percent of current residents spend down some time during their stay. And, those who remain in the nursing home for an extended period of time are more likely to pass eventually to Medicaid.
Thats why, the Federal Medicaid law attempts to prevent people from transferring savings and other quantifiable resources to adult children, siblings or other resources to meet the test and receive Medicaid assistance and nursing home coverage. It does so by imposing exclusion of a time in nursing home coverage to people involved in these transfers. The period of exclusion from Medicaid coverage is related to the amount of funds transferred the average monthly cost of nursing home in the state, and the date on which the transfer was made.
Moreover, although efforts have been made to promote the purchase of private insurance for long-term care (LTCI) in several states, these plans were a little success, and are unlikely to have much effect on the growth of Medicaid costs of care. And, to help develop the sale of LTCI and ease the burden of Medicaid, the Partnership for Long Term Care was created which began in 1988.
This Partnership for Long Term Care offers an alternative to spending or transfer of property by forming a partnership between Medicaid and private insurance for long-term care. Under the plan, if the insured receiving long-term care already exhausts the benefits of private LTCI policy, he or she can receive Medicaid benefits with more liberal eligibility rules to protect assets amount equal to the benefits payable under the policy.