What Tennesseans Need to Know About Medicare, TennCare, and Medicaid for Home Health Care and Long-Term Care
Navigating the complexities of Medicare, TennCare, and Medicaid can be daunting, especially when it comes to understanding what is covered and what isn’t in terms of home health care (HHC) and long-term care (LTC). In Tennessee, the out-of-pocket costs for home health care can range from $4,000 to $8,000 per month, while long-term care in a nursing facility can cost $7,000 to $10,000 or more per month. Many people are unaware that Medicare does not cover most long-term custodial care, leading to significant financial challenges for families unprepared for these expenses.
In this overview, we will explore the key aspects of what these programs provide, who qualifies, and the important distinctions that every Tennessean should know when planning for their future care needs.
Disclaimer: Always consult with a professional tax advisor, legal professional, and insurance expert before making any decisions related to taxes, legal matters, or insurance policies.
Medicare and Home Health Care (HHC) and Long-Term Care (LTC)
Medicare is a federal program primarily designed to provide healthcare coverage to individuals aged 65 and older or those with certain disabilities. While Medicare does offer some benefits related to home health care and long-term care, there are important limitations that must be understood.
What Medicare Covers for Home Health Care
Medicare offers coverage for specific home health care services, but these services are generally short-term and medically necessary. Here’s what Medicare typically covers:
- Skilled Nursing Care: Part-time or intermittent skilled nursing care provided by a licensed nurse.
- Physical Therapy: For patients recovering from an injury or illness.
- Occupational Therapy: Assistance with relearning basic daily tasks.
- Speech-Language Pathology: Treatment for speech and communication issues.
- Medical Social Services: Services to help cope with the emotional and social aspects of recovery.
- Home Health Aide: Medicare covers part-time home health aide services if you need skilled care. However, this does not include custodial or personal care (such as help with dressing or bathing) unless it is part of the skilled care being provided.
Key Requirement: To qualify for home health care under Medicare, a doctor must certify that you are homebound, and the care must be provided by a Medicare-approved home health agency.
What Medicare Does Not Cover for Home Health Care
Medicare has clear limitations when it comes to long-term or ongoing care. It does not cover:
- Custodial Care: Non-medical care that helps with daily activities like bathing, dressing, and eating.
- 24/7 In-Home Care: Medicare does not cover around-the-clock care.
- Homemaker Services: Help with shopping, cleaning, and laundry.
What Medicare Covers for Long-Term Care
When it comes to long-term care, Medicare coverage is even more limited. It primarily covers short-term stays in skilled nursing facilities (SNF) under specific circumstances. Typically, this occurs after a hospital stay of at least three days due to an acute illness or injury.
- Skilled Nursing Facility Care: Medicare will cover up to 100 days of skilled nursing care if it’s related to recovery after a hospital stay. The first 20 days are fully covered, while there is a copay for days 21–100. After 100 days, you are responsible for all costs.
- Hospice Care: Medicare provides coverage for hospice care for terminally ill patients. Hospice care focuses on pain management and emotional support rather than curative treatment.
What Medicare Does Not Cover for Long-Term Care
- Long-Term Custodial Care: For individuals who need long-term assistance with personal care, Medicare offers no coverage.
- Assisted Living or Nursing Home: Unless you require skilled nursing care for recovery after hospitalization, Medicare does not cover the costs of assisted living or nursing home stays.
TennCare and Long-Term Care (LTC)
TennCare is Tennessee’s Medicaid program, which provides healthcare coverage to eligible low-income individuals. When it comes to long-term care, TennCare can offer a significant benefit to those who qualify. However, TennCare’s eligibility requirements are much more restrictive compared to Medicare.
TennCare CHOICES Program
The CHOICES program under TennCare is specifically designed to provide long-term services and support for individuals who need nursing home care or who require help with daily activities at home or in an assisted living facility.
Services Covered by CHOICES:
- Nursing Home Care: TennCare will pay for nursing home stays for eligible individuals.
- Home and Community-Based Services (HCBS): For those who prefer to stay at home or in the community, CHOICES covers services such as home health care, personal care, and adult day care.
Eligibility for CHOICES:
- Medical Eligibility: You must require the level of care provided in a nursing home, even if you are planning to receive care at home or in the community.
- Financial Eligibility: TennCare imposes strict financial eligibility criteria based on income and assets.
Financial Eligibility for TennCare CHOICES
To qualify for CHOICES, applicants must meet both income and asset limits. As of 2024:
- Income Limit: Your monthly income must not exceed $2,742 (subject to change), although some individuals may qualify through a Qualified Income Trust (QIT).
- Asset Limit: You must have $2,000 or less in countable assets (for an individual). However, certain assets, like your home (up to a certain value) and personal belongings, may not be counted.
Medicaid Eligibility and Spend Down Rules
For Tennesseans needing long-term care and seeking coverage under Medicaid, understanding the spend-down rules is crucial. These rules govern how assets are counted and what must be spent before Medicaid eligibility can be granted.
Medicaid Spend-Down Rules for Long-Term Care
Spend-down refers to the process by which individuals can “spend down” their assets to meet Medicaid’s strict financial eligibility requirements.
- Exempt Assets: Medicaid excludes certain assets, such as:
- Your primary residence (up to a specific equity limit).
- One vehicle.
- Personal belongings and household goods.
- Burial arrangements.
- Countable Assets: Include bank accounts, investment accounts, and other financial holdings. You may be required to spend down these assets to qualify.
- Gifting or Transferring Assets: Medicaid looks back five years (known as the “look-back period”) to see if any assets were given away or sold for less than their market value. If such transfers are found, Medicaid can impose a penalty period during which you are ineligible for coverage.
- Spousal Protections: If one spouse needs long-term care and the other does not, Medicaid allows certain protections for the non-applicant spouse. For example, the non-applicant may be entitled to keep a portion of the couple’s income and assets, which is called the Community Spouse Resource Allowance (CSRA).
What Medicaid Covers for Home Health Care
Medicaid offers broader coverage for home health care than Medicare, particularly for those with low incomes. Through TennCare, Medicaid can provide the following services:
- Personal Care: Help with daily activities like bathing, dressing, and eating.
- Skilled Nursing Care: Similar to Medicare, but with less restrictive eligibility.
- Homemaker Services: Help with housekeeping, shopping, and meal preparation.
- Therapies: Physical, speech, and occupational therapy for eligible individuals.
- Adult Day Care: Provides a safe and supportive environment for elderly or disabled individuals during the day.
Important Limitations
While Medicaid covers many of these services, it does not pay for 24/7 care at home. The services provided under TennCare’s CHOICES program for home care are typically part-time or intermittent.
How to Plan for Long-Term Care
Given the limitations of both Medicare and Medicaid, Tennesseans should consider other options for funding long-term care, especially if they want more flexibility in the type of care they receive and where they receive it. Options may include:
- Long-Term Care Insurance: Policies designed specifically to cover costs associated with long-term care.
- Hybrid Policies: Life insurance policies with long-term care riders.
- Annuities with Long-Term Care Benefits: Certain annuities offer features that can help cover the costs of long-term care.
- Personal Savings: Many individuals choose to save for potential long-term care expenses, either through tax-advantaged accounts or investment portfolios.
Consulting Professionals
Planning for long-term care is a complex process that requires careful consideration of both your health care needs and financial resources. Because the rules surrounding Medicare, TennCare, and Medicaid are constantly changing, it’s essential to consult with a professional:
- Tax Advisors: To understand the tax implications of long-term care planning.
- Legal Professionals: To create trusts, wills, or powers of attorney that protect your assets and provide for your care.
- Insurance Professionals: To explore insurance options that may help cover future care costs.
Conclusion
Understanding what Medicare, TennCare, and Medicaid cover for home health care and long-term care is essential for all Tennesseans, particularly those planning for their future health care needs. While Medicare provides short-term, medically necessary care, it does not cover long-term custodial care, leaving a significant gap that TennCare’s CHOICES program or Medicaid may help fill for those who qualify.
However, with strict eligibility rules and complex spend-down requirements, it’s crucial to plan ahead. Working with professionals in tax, legal, and insurance fields can help ensure that you or your loved ones receive the care needed without facing financial devastation.
Disclaimer: This article is for informational purposes only and should not be considered as legal, tax, or insurance advice. Always consult with a professional before making decisions.
