COVID-19, Medicare, and Long-Term Care: Fact or Fantasy

(Credit: CDC)

On Oct. 5, President Trump was released form Walter Reed National Military Medical Center following three days of treatment for severe acute respiratory syndrome coronavirus 2 — a virus that has infected 11.6 million US citizens and killed 250,000 since March.

At 74 years of age, Trump seemed to shake off COVID-19 and its effects,

He received an experimental “polyclonal antibody, oxygen, the antiviral drug remdesivir and the steroid dexamethasone. The average citizen probably could not afford, or get access to, the combination that brought about Trump’s remarkable recovery.

The U.S. COVID-19 outbreak first drew attention in late February, when it affect a nursing home in Kirkland, Washington. In spite of strict lockdowns, no-visitor policies, and public scrutiny, many states reported a high number of COVID-19 deaths in nursing homes.

(Related: LTC Type Has Big Effect on COVID-19 Infection Rates: Provider Survey)

This uptick in nursing home deaths laid bare clients’ concerns about aging parents, and about where those parents can get care when they need it.

The term “long-term care” (LTC) refers to a range of services and support for personal care needs.

LTC services, which are sometimes called custodial care services, include help with everyday task like bathing, dressing, and using the bathroom. Those activities are often classified as “activities of daily living,” or ADLs. These services can be provided in assisted-living facilities, nursing homes or an individual’s own home.

Genworth commissioned an LTC cost survey in 2019. It found that the median cost of a home health aide was $4,385 per month, or $52,000 a year. That includes up to 44 hours of care per week. For around-the clock care, the cost is much higher. The cost is also higher in areas where the overall cost of living is high.

Medicare does not cover long-term care if that is the only care an individual needs. A Medicare beneficiary pays 100% of the cost for non-covered services, including most long-term care.

COVID-19 has made the kind of coverage that does pay for LTC services, long-term care insurance (LTCI), more complicated to buy.

Many carriers have adjusted, by:

1. Changing underwriting procedures and requirements

Some carriers have changed the maximum issue age.

Many now require in-person meetings for cognitive screening, assess mobility and issues like knee or hip problems

2. Giving extra scrutiny to people who tested positive for COVID-19

Applicants have to show they have received a negative test three to six months earlier.

3. Offering faster application processes for healthy young people

For younger people, carriers are conducting phone interviews along with electronic medical records.

4. Increasing premiums for some

Rates have gone up from 5% to 50% for some new insureds, and, in some cases, insurers have reduced spousal discounts from 30% to 15%.

Note that an insurer cannot raise one customer’s rates due to that customer’s individual circumstances. To raise rates, insurers must obtain approval from the state and increase premiums for an entire block of policies.)

In 2012 I wrote an article about financing long-term care, in that article I also addressed facts vs fantasy about long-term care.

The attention being brought to nursing homes, COVID-19 diagnosis of residents of these facilities and the death of residents left languishing in facilities along with states that instituted no-visitor policies, now is a perfect time to look at those “facts vs fantasy” about long-term care again.

Fact v. Fantasy

1. Fantasy: “The government will pay….”

The fact is Medicare will not pay.

Medicaid will pay, but are they prepared to deal with the price they have to pay?

Medicare is a federal health insurance program for seniors who are over 65 and are eligible to participate as a part of the Social Security program.

Medicare is designed to cover the costs associated with hospitalization and acute illness. It is not a program designed to cover the costs associated with chronic care needs such as nursing home stays.

And while you can look to Medicaid for long-term care needs the eligibility requirements for Medicare requires you to be impoverished.