robert w. maher
Attorney-at-Law  · Partner with the Law Firm Dyer & Maher.
Nursing Home Planning


This is generally the first line of defense for healthcare expenses. People pay out of pocket for prescription drugs, co-payments, deductibles, additional services, and non-healthcare expenses (such as respite, housekeeping, care management, and companion services) not covered by insurance or other benefits.


Medicare is the federal government-run health insurance program for those over age 65. It covers hospital and doctor expenses, as well as some preventive procedures. Medicare also covers home healthcare and hospice services when ordered by a doctor. Individuals may purchase private "Medigap" insurance to help pay for those services that Medicare does not cover. Medicare will only pay for short-term skilled nursing such as when you are recovering after a hospital stay or surgery.

Although their names are confusingly alike, Medicaid and Medicare are quite different programs. For one thing, all retirees who receive Social Security benefits also receive Medicare as their health insurance. Medicare is an "entitlement" program. Medicaid, on the other hand, is a form of welfare — or at least that's how it began. So to be eligible for Medicaid, you must become "impoverished" under the program's guidelines.


Also, unlike Medicare, which is totally federal, Medicaid is a joint federal-state program. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive federal money, which pays for about half the state's Medicaid costs. (The state picks up the rest of the tab.) This complicates matters, since the Medicaid eligibility rules are somewhat different from state to state and they keep changing. This most recently occurred with the passage of the Deficit Reduction Act of 2005 (the DRA), which significantly changed rules governing the treatment of asset transfers and homes of nursing home residents

In the absence of any other public program covering long-term care, Medicaid has become the default nursing home insurance of the middle class. Lacking access to alternatives such as paying privately or being covered by a long-term care insurance policy, most people pay out of their own pockets for long-term care until they become eligible for Medicaid.


While long-term care insurance is gaining popularity, the rules and fine print can often be confusing, the policies prohibitively expensive, and/or your pre-existing conditions limiting. However, for many people, this form of insurance can provide the financial means to stay at home when illness leaves them debilitated or in need of skilled nursing care. When shopping for long-term care insurance, it is best for you to speak with an impartial third-party (such as a lawyer) to help explain things — not because insurance salespeople are dishonest, but because you should see how the policy fits in with your other plans and what some of the fine print really means.