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As America ages, the need to address how we pay for long-term care becomes increasingly urgent. A recent study indicates that one in five Americans age 50 or over may need long-term care sometime within their lifetime. Most are ill-equipped to deal with the enormous cost – just one in four Americans can afford the cost of long-term care for a year. 

Medicare only covers some skilled nursing care expenses for up to 100 days, after a qualifying hospital stay of three consecutive days. On average people who use Medicare for skilled nursing stay in a facility for 10 - 20 days.  Coverage depends on the degree of skilled care needed.  Once a resident is stabilized in a skilled nursing facility, Medicare typically does not pay.  

Medi-Cal (known nationally as Medicaid)
Nearly two-thirds of all nursing facility residents rely on Medi-Cal. The proportion is even higher at facilities caring for people with developmental disabilities, where nearly 100 percent of clients are Medi-Cal beneficiaries. Unfortunately, seniors must deplete their life savings and impoverish themselves in order to become eligible for Medi-Cal. Medi-Cal programs vary from state to state. Read more here.

Medicare, administered by the U.S. Department of Health and Human Services (HHS), is a federal insurance program for (1) people age 65 and over: (2) people disabled for at least two years; or (3) people suffering from chronic kidney disease. Nursing facility coverage under Medicare is very limited - one hundred days or less. Medicare pays for approximately 12 percent of nursing facility patient days in California. Read more here.

Long Term Care Insurance 
Long term care insurance can protect an individual's assets and provide peace of mind. A good long- term care insurance policy will cover all levels of care, especially personal care, and all settings, including facility care, community adult day care, assisted living facilities, and nursing facilities.

The cost of a long term care insurance policy primarily depends on the age of the policy holder when purchased. The annual premium for a low-option policy for a person at age 55 is about $709. This same policy for a 65-year-old person is about $1,342 per year; for older persons, the policy would cost much more. 

Recognizing the growing need for better insurance coverage, the State of California formed the Partnership for Long-Term Care, an innovative program offered by the Department of Health Care Services in cooperation with a select number of private insurance companies. The insurance companies which participate in the program have agreed to offer high quality policies that meet stringent requirements set by the Partnership and the State of California.

Supplemental Security Income/State Supplementary Programs (SSI/SSP) 
The SSI Program is a federally funded program which provides income support to those aged 65 or older, blind or disabled.  SSI benefits are also available to qualified blind or disabled children.  The SSP Program is the state program which augments SSI.  Both SSI and SSP benefits are administered by the Social Security Administration (SSA)  Eligibility for both programs is determined by SSA using Federal criteria.  A person who qualifies for SSI also qualifies for SSP.  Benefits are in the form of cash assistance.  

Third Party Payors 
This category of financing includes individual insurance plans other than Medicare or Medi-Cal including managed care, Veteran's benefits; municipal assistance benefits; and long term care insurance policies. These sources account for about 9 percent of long term care payment.

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