These are unique times with all the changes in the tax and healthcare laws. As such, people need to understand that the New Healthcare Law is not going to protect them, their spouse, home, or life savings from the high cost of nursing-home care. That is completely UP TO YOU!
Today, nursing home care cost is upwards of $120,000 annually. A heartbreaking diagnosis of Alzheimer’s can mean a prolonged nursing-home stay of up to ten years or more – translating to sometimes over a million dollars. Who pays? For Alzheimer’s, dementia, or health issues related to aging, government payments are only available after almost all the family’s assets have been completely depleted. The result is a spouse and family may be left with no home of their own and very little to live on. For more information, feel free to download our Free Massachusetts Elder Care Guides.
So what does Obamacare provide? The Patient Protection and Affordability Act and the Health Care Education and Reconciliation Act are collectively known as the Affordable Care Act (ACA). The ACA will expand health coverage for all Americans such that none of the guaranteed benefits under Medicare Part A and Part B is being cut. In fact, many benefits are being improved. However, households with higher incomes will be required to pay more for Medicare via the new higher Medicare tax. In addition, those with higher incomes will also be subject to an unprecedented Medicare tax to be applied to unearned income (investment income, royalties, etc.). Some of the provisions of the health care law will take affect immediately and some over the next several years.
The ACA has not eliminated the need for seniors requiring long-term care to plan ahead. Planning ahead and applying for MassHealth (Massachusetts Medicaid) to pay for long-term care (in a nursing home or in the community) will still be necessary. As a matter of fact, planning ahead is the only way for an individual or family to avoid becoming victims of nursing home poverty! The government’s plan to provide for long-term care still be requires people to “spend down” their assets in order to qualify for assistance to pay the cost of a nursing home, which currently averages $10-$12,000 per month in Massachusetts.
On the plus side, a provision that will benefit seniors immediately is assistance with the Medicare Part D donut hole* (Medicare Part D coverage gap). A $250 rebate will be paid to Medicare beneficiaries who hit the donut hole in 2010 (even by $1). The first checks were distributed last June and will be sent periodically after that. Seniors do not have to do anything to get their checks. They will come automatically. (Be cautious of scammers who may tell you that your checks can be obtained more quickly if you pay a fee.) Beginning in 2011, once the “donut hole” is reached, there will be a 50% discount on brand-name prescription drugs and a 7% discount on generic prescription drugs. By 2020, this “donut hole” will disappear, and Medicare beneficiaries will pay 25% of the cost until they reach the catastrophic* coverage level.
*The donut hole is the Medicare Part D coverage gap. Once a Medicare beneficiary reaches the prescription drug coverage limit, the Medicare beneficiary is responsible for the entire cost of prescription drugs until expenses reach the catastrophic limit. In 2011, this means costs above $2,840 in covered drug costs until you spend $4,550 out of pocket. Catastrophic limit assures that once you have paid $4,550 out of pocket in drug costs for a calendar year, almost all your drug costs above that amount will be paid
To learn more about how to plan ahead and your options to: protect your assets, protect your spouse, your savings, in-home care options, Veterans benefits, etc., attend one of our FREE workshops on The New Healthcare Law and How It Affects Seniors. Attendance requires registration either by phone: 800-964-4295 (24hrs), or you may register online. Please refer to our website for upcoming dates.