The Risks of Medicaid Planning
Bob Richards--Marketing and Financial Services
Using the government to pay for your long-term care costs may seem like a good idea. And Medicaid planning has become a popular topic among seniors. But what?s in store for individuals who plan to rely on a welfare program for their special needs?
A study has shown that there was a shortfall between Medicaid reimbursements paid to nursing homes and Medicaid allowable costs. Among the 37 states surveyed, the average disparity was almost $10 per day on every Medicaid patient. And for the last year data is available, the total amount of unreimbursed, allowable Medicaid costs exceeded $3 billion.
To wipe out this shortage, states would not only have to increase the reimbursements to nursing homes by at least $10 per day. They would also have to make allowances for increases. However, considering the status of many state?s budgets, this is not likely to happen in the near future. Therefore, the chance is high that Medicaid shortfalls will increase. But this is a problem for the government and nursing homes to deal with, thus it doesn?t affect you. Right?
If nursing homes continue to feel a cash-flow squeeze, they could possibly reduce the number of beds available to Medicaid patients. The nursing homes would then be in a position to accept more patients who have insurance or pay out of pocket. And the Medicaid patients might end up in another part of the state where space is available.
Medicaid is the source of payment for 60% to 70% of the residents in the average nursing home. On the other hand, you may not want to count on the government’s program and the changes that politicians implement.
A long-term care insurance plan can give you the additional income that you may need to pay for those special-need expenses. In addition, it can protect your assets, and provide the freedom to choose where and how you receive the services.