Basically, there are four ways to pay for long-term care: (a) Private pay, which can cost more than $200,000 per year in some areas, (b) Medicare, which only covers short-term rehabilitation for skilled nursing care and does not cover custodial, long-term care, (c) long-term care insurance, which must be purchased while you are healthy, and (d) Medicaid, which is the only government program that pays for long-term care.
Medicaid was intended to be for people who are destitute. In fact, to qualify you must meet strict income and asset guidelines. This presents middle class folks who have a loved one with a chronic illness with a Hobson’s choice: impoverish yourself and your family, or engage in Medicaid planning. Once you have been diagnosed with a chronic illness such as Alzheimer’s disease, Parkinson’s disease, or some other illness for which modern medicine does not have a cure, you will not qualify for long-term care insurance and Medicare does not pay for your long-term care. Thus, you either pay out of your own pocket for long-term care or you work with an elder law attorney in an attempt to qualify for Medicaid.