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Long-Term Care Financing

"I know my loved one will need long-term care sometime in the next few years, but I do not know how my family and I will pay for it."

Most long-term care expenses are paid out-of-pocket, but Medicare, Medicaid or private long-term care insurance may help.

Medicare does not cover long-term care. Nevertheless, Medicare does have limited nursing home and home care benefits for people who need skilled nursing services and who meet other criteria. These can sometimes be a significant short-term help to families paying for long-term care. Check your local Social Security office for information about Medicare home care, skilled nursing facility care and hospice care.

Medicaid is a state and federally funded medical assistance program for people with low incomes. Medicaid helps pay for nursing home care and -- sometimes -- long-term care services at home. Medicaid services and eligibility requirements vary from state to state, so check with your local Medicaid office for information. (It is listed in the government section of your phone book. The Eldercare Locator at 1-800-677-1116 can also tell you where to get Medicaid information from your state.) Be sure to ask about the Qualified Medicare Beneficiary (QMB) program, which pays Medicare premiums, deductibles and co-payments for eligible low-income people.

Many people are not eligible for Medicaid when they first need long-term care. However, they become eligible after they have "spent down" their savings paying for care.

Private long-term care insurance policies are the answer for some people. However, long-term care insurance is expensive. Most older people cannot afford coverage that gives them real protection against the high cost of long-term care. Moreover, it usually must be purchased before you are age 80 or have medical conditions that will require long-term care services.

Long-Term Care Insurance Consumer Guides

If you are considering buying long-term care insurance for yourself or a loved one, these publications can help you decide:

AARP's Before You Buy: A Guide to Long-Term Care Insurance (D12893). New edition available from AARP Fulfillment, 601 E St., NW, Washington, DC 20049. (Free)

A Shopper's Guide to Long-Term Care Insurance. National Association of Insurance Commissioners, 120 W. 12th St., Suite 1100, Kansas City, MO 64105. (Free)

Long-Term Care: A Dollar and Sense Guide. United Seniors Health Cooperative, 1331 H St., NW, Suite 500, Washington, DC 20005. ($12.50 includes postage and handling.)

Other options for paying for long-term care include home equity conversion (HEC). Reverse Mortgage Information: Reverse mortgages, sale leasebacks, property tax deferral and deferred payment loans enable older homeowners to convert the equity in their homes into cash, without having to move or make regular loan payments.

For more information, write for AARP's Home Equity Conversion Package (D15601), AARP Fulfillment, 601 E St., NW, Washington, DC 20049. (Free)

The contents of all material available on AARP Webplace are copyrighted by AARP. Copyright is not claimed as to any part of an original work prepared by a U.S. or state government officer or employee as part of that person's official duties.

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