The Race to Medicaid: Not the race you want to win
It is no secret that getting old can get expensive. With declining health and rising need for help around the home, in the home, or even a move to an assisted living home, the cost can become overwhelming and scary. “What happens when Mom runs out of money?” “Dad doesn’t have that kind of money!” “I didn’t work my whole life to pay to sit in a nursing home!” “I want to leave this for my kids!” These are all comments we hear at Vesta Senior Network on a very regular basis.
So, what does happen when Mom runs out of money? Well, in the state of Wisconsin, we are fortunate to have Family Care. In simplest terms, Family Care is the piece of the Medicaid or Title 19 pie that will pay for assisted living. Title 19, or straight Medicaid, has long paid for nursing home care when an individual has exhausted funds. Since 1999, Wisconsin has found a more pleasant, more cost effective way to care for elders through the Family Care program. Assisted living communities, as you may have recognized, are popping up all over and provide a more homelike, less institutional, and more cost effective way to care for our loved ones.
This sounds great, doesn’t it? Sign me up, right? Well, hold on a minute. The race to Medicaid (or Family Care) is not the race you want to win. When an assisted living community accepts Family Care benefits to care for someone, it is taking a significant cut in rate. After all, Family Care is a government contract. Not only are these communities taking a much lower contracted rate, getting a raise on this rates to adjust for inflation is difficult, if not impossible. Think for a minute…what would your household budget look like if half the month you were working with half your income, and you didn’t always get paid on the day that you expected that direct deposit to hit your account? Not pretty, right? But, if that were truly the case, you would plan and adjust for that. And that is exactly what the well run assisted living communities are doing. These communities are working with a plan in place.
With that said, in our experience, we have found that the really good facilities are requiring that new residents have some ability to pay privately for a designated period of time prior to converting to Family Care (one would become eligible for family care when her or she has no more than $2,000 in assets as a single person, aside from money set aside for funeral expenses.) For example, an assisted living community will require that someone has enough assets to last perhaps 2 years. Once a resident has outlived those assets, the community will accept Family Care assignment to pay for care. So what does 2 years look like in dollars? Let’s say that on average, someone’s care may be $5,000 each month. To be safe, $150,000 is a nice number to consider as your long term care nest egg. That nest egg is what is going to provide you with some really good choices when it’s time to consider assisted living. Those communities that are balancing their budgets by having both private pay and Family Care residents are the ones that can continue to offer the best services: good staffing, good activities, good food…all the things that are important.
An important fact to remember is that assisted living communities are privately run businesses and can set their financial requirements independently. This means that some places may not take Family Care at all, others may have a specific requirement with respect to assets, and others may accept Family Care “1st Dollar,” meaning they will admit someone already on Family Care.
In a perfect world, every community could admit everyone already on Family Care. However, the reality of the situation is that it just can’t work long term. These communities have rising costs, building maintenance, all of the same issues that each of us has to manage in our own homes. The communities that have worked out a plan or formula that provides for a mix of private pay residents and Family Care residents are the ones that we choose to work with. These are the communities that have the integrity to help their residents plan for the future. One wonderful assisted living community owner once said to me, “What am I going to do after I have taken all their money, kick them out?” Fortunately, we have found enough community owners and administrators who feel this way. Unfortunately, there are others who will say, “Don’t you want your mom to have the best while she is still healthy enough to enjoy it? Later, perhaps a place that isn’t as nice won’t matter to her.” That is a philosophy that we don’t agree with at Vesta Senior Network. However, every family has to make their own decisions regarding care for their loved ones.
So what’s going to happen to our benefits for seniors with a new administration? As this Tsunami of Seniors swells, we will be pushing the system to its very limit. We can’t say what will happen next. We don’t have a crystal ball. What we do know, however, is that at Vesta Senior Network, we will continue to work to find those gems who are providing the best care while honoring those who have worked their entire lives to provide for their families and save for their retirements.
For questions or comments, please contact Pam Foti at firstname.lastname@example.org or 414.750.6767