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The Ribbon - Care for Caregivers
Issue 17
September 4, 1998

There is excitement in the air! A Gathering of Friends is being planned for October, 1999. Check out our HAPPENINGS section for more information.

This issue will contain information to help answer the question "How do we pay for Nursing Home care? We hope it will help.

Paying for Nursing Home Care

The cost of nursing homes ranges from expensive to exorbitant--on the order of $25,000 to $50,000 a year. It's like private college, only more so, and quite possibly, for more than four years. Paying for nursing home care requires planning, creativity, and ingenuity. It may precipitate conflict and resentments among family members. That's why you should start planning for it early, ideally, shortly after your loved one is diagnosed with Alzheimer's disease.

Payment options include:



Affected individuals may have enough financial assets to pay for their nursing home care. Of course, the person's assets may be tied up in a home and in various investments and insurance policies. You may have to do some detective work to locate them all.


Life Insurance

You may be able to use the person's life insurance policy(ies) to raise cash. Here's how:

Viatical settlements

In recent years, special brokerage firms--viatical settlement companies--have made a business of buying life insurance policies for cash. The viatical firm has a physician examine the policy-holder, assesses how long the person is likely to live, and then offers to buy the policy for an amount that gives the policy holder immediate cash for long-term care while still living, and at the same time, gives the brokerage and its investors a return on the investment. Viatical settlements typically range from less then 60 percent of the death benefit if the person appears to have more than two years to live, to around 90 percent if the person appears likely to die within a few months.

Say the policy death benefit is $100,000, and the viatical company believes the person's life expectancy is four years. The firm might offer $45,000. The family can then use this money to pay for nursing home care, and the brokerage collects the $100,000 when the person dies. If the person dies sooner, the brokerage makes more money. If the person survives longer, the firm loses money.

Pre-death sale of life insurance policies developed to cover the cost of AIDS care. But the concept has been expanded to include Alzheimer's disease and other conditions that require extended nursing home care. For more information about pre-death sale of life insurance policies, contact an insurance broker or the Alzheimer's Association, or the following Web site: --Viatical Association of America

Loans from life insurance policies

If your loved one has a "whole life" or "universal life" policy, it is usually possible to borrow against its cash value. (Cash value is different from the death benefit; check the paperwork or call the insurer to find out the cash value.) You have to repay the loan with interest. If you repay it in full by the time the person dies, the beneficiary receives the full death benefit. If not, the insurer reduces the death benefit by the amount of the unpaid loan balance.


A Reverse Mortgage

Reverse mortgages allow people age 62 or older to convert their home equity into monthly income that can be used to cover caregiving costs. Instead of you making payments to the bank, the bank pays you. But unlike a regular mortgage, in which you own more and more equity over time, with a reverse mortgage, the bank buys equity from you, and when it comes time for you or your heirs to sell the home, the bank owns a portion of it--or possibly all of it.

Reverse mortgages are good alternatives for people with early Alzheimer's disease who want to stay in their homes, or in cases where a caregiver moves into the affected person's home. They work best, of course, for those who have considerable equity in their homes.

Reverse mortgages are available through many banks, the Federal Housing Administration (FHA), and the Federal National Mortgage Administration (Fannie Mae). In general FHA reverse mortgages are most attractive to those with less than $150,000 of home equity. Fannie Mae reverse mortgages tend to be most attractive for those with home equity of $150,000 to $225,000. And private bank reverse mortgages are usually most attractive to those with home equity of more than $225,000.

For more information, contact your bank, or consult the U.S. Government listings in your phone book for FHA or Fannie Mae.


Long Term Care Insurance

With nursing home care costing $25,000 to $50,000 a year, and the government periodically threatening to cut Medicaid payments for long-term care, many people have turned to long-term care insurance as a way to guarantee payment of nursing home care.

The problem is that consumer groups complain that long-term care insurance policies rarely pay out as purchasers hope. So shop very carefully.

Long-term care policies must be purchased before the policy-holder needs long-term care. The time to buy is as soon as possible after an Alzheimer's diagnosis. Unfortunately, some long-term care insurers do not sell policies to people with pre-existing conditions, such as Alzheimer's disease. Be sure to examine excluded conditions before you buy.

Long-term care insurance rarely covers the entire cost of care for the remainder of the person's life. Most long-term care policies offer benefits that range from $50 to $200 a day, with a maximum number of days stipulated in the policy.

The cost of long-term care insurance varies tremendously depending on:

  • The age and health of the policy-holder. The older and sicker you are, the more expensive the coverage.
  • The daily pay-out. The more money, the more expensive the coverage.
  • The pay-out duration. The longer, the more expensive.

Some cover both. Check the coverage before you buy. Most policies have deductibles and elimination periods. You must pay a certain amount before the policy pays anything, and you must pay for a certain period of time before the policy coverage begins.

Some policies have fixed premiums. In others, the premiums increase annually.

Some policies require continued payment of premiums while the policy-holder is in long-term care collecting benefits. Others have a "premium waiver" that allows policy-holders to stop paying premiums while they are receiving benefits.

Some policies pay-outs offer inflation protection. Others do not.

Read the fine print before you buy. Talk with several brokers before you buy.

For more information, check


VA Benefits

If the person is an armed forces veteran, placement might be possible in a Veterans Administration facility. For information, contact the Veterans Administration or the Alzheimer's Association.



Family members might decide to pool their resources and pay for nursing home care. In some states, relatives are required to provide a certain amount of support for a certain time. Check your state regulations.



Medicare pays for up to 150 days of nursing home care in cases of serious illness in those who need intensive rehabilitation. Alzheimer's disease does not qualify because currently there is no possibility of rehabilitation. However, if a person with Alzheimer's also has some other condition, for example, a stroke, Medicare financing may be possible for a time. For more information, contact a Medicare office, social worker, the person's physician, or the Alzheimer's Association.



Medicaid is a federal safety-net program administered by the states. It pays for health care, including long-term nursing home care, for those who have no other financial resources. In most states, it is known as Medicaid, but some state programs have different names. California's program is called Medi-Cal.

Some people recoil from Medicaid because it feels like welfare. However, there is no shame in receiving benefits. It's rather like Social Security. People with Alzheimer's disease paid taxes before they were stricken, and some of that money went to Medicaid benefits for other people. Now that they need Medicaid, it's there for them. Medicaid currently pays the bills for about two-thirds of the nation's nursing home residents.

Eligibility criteria differ from state to state, but in most states, people in nursing homes receiving Medicaid cannot have more than a few thousand dollars in total personal assets (which can be used for gifts and personal items). Individuals must "spend down" their own funds until they qualify for Medicaid, and then the program assumes the cost of their care for the rest of their lives.

In cases where one spouse has Alzheimer's and the other needs money to live on, asset transfers can be arranged. This strategy enumerates the couple's assets, and divides them in two. (The couple's home is exempt as long as the unaffected spouse continues living in it.) The half belonging to the affected individual can then be spent on nursing home care until Medicaid eligibility has been established. The half belonging to the unaffected spouse can be used by that person with no restrictions, and those assets in no way make the spouse with Alzheimer's ineligible for Medicaid.

However, asset transfers can be tricky. They must be arranged at least 30 months before the affected individual applied for Medicaid. In addition, you must keep detailed records, and present them for inspection when you apply. The Alzheimer's Association can help you arrange things. You might also need an accountant and an attorney. If you need a lawyer, find one experienced in handling Medicaid applications. For a referral, contact your local Bar Association.

It may be a struggle to obtain Medicaid benefits--even if you're confident that the person qualifies. The reason is that states generally interpret eligibility criteria conservatively in order to save money. Be persistent. File appeals if necessary. For more information, contact the Alzheimer's Association or the National Citizen's Coalition for Nursing Home Reform (1424 - 16th St. N.W., Suite 202, Washington, D.C. 20036-2211; (202) 332-2275; no Web address).You may have to hire an attorney.

For more information on Medicaid, contact the nursing home you're considering, or your local or state Departments of Health, Social Services, or Welfare.


Medicaid is a federal program that provides payment for medical care for persons unable to afford to pay. Medicaid covers physicians' services, hospital care, medications, supplies and other necessary services once a person has been made eligible for the program. It also pays for the expenses of long-term care in a nursing home or an adult care home.

The Medicaid program is administered independently in each state, but the basic eligibility standards are the same throughout the United States. Eligibility is based upon the amount of assets a person has along with the income that the person receives. Eligibility is determined at state Medicaid offices and, in the case of married individuals, the assets and income of both spouses are considered in the determination process.

It is important to distinguish between Medicare and Medicaid. Medicare is an insurance program providing payment for medical needs for persons 65 and over and for certain disabled persons. All persons 65 and over, regardless of financial resources or income, are eligible for Medicare. Medicare, however, provides only limited coverage in the case of an illness, excluding payment for prescription medications and not covering any of the cost of long-term custodial care in nursing homes or adult care homes. These non-covered items must be paid privately by Medicare insureds, unless coverage is provided under some type of supplemental policy the person has purchased independently. Medicaid, on the other hand, pays for all medical needs for those of any age who have been determined to be eligible. In fact, a person with limited income and resources who has Medicare coverage may also qualify for Medicaid benefits.

What You Need To Know

Medicaid is considered to be one of the most complex laws of the United States and, further complicating matters, each state has its own interpretations of what the law means. Many elder law attorneys have carefully studied the Medicaid statutes and regulations and are able to assist clients in assuring their rights under the law.

Medicaid is most often of importance to middle-income Americans because the cost of long-term care for such illnesses as Alzheimer's Disease or paralysis caused by a stroke is not covered by Medicare. Most people who need such care for extended periods will eventually deplete their assets and be unable to pay the costs of their care. At such a time Medicaid is available to pay the difference between their income and the actual costs of care, including not only room and board, but also including physicians' care, medications, hospital care and all other reasonable necessary medical expenses. Medicaid covers the costs of such care in nursing homes, adult care homes, hospices, and, in appropriate cases, in the patient's own home.

If faced with the possibility of such long-term care expenses, there are certain rules that you should be aware of:

  • In determining eligibility for Medicaid payment for long-term care expenses, the eligibility team will review the individual's actual need for care, the person's available resources (including life insurance and retirement plans) and income received from any source.
  • In determining the eligibility for one spouse, the resources and income for both spouses is considered, regardless of community property laws or the nature of the ownership of the asset.
  • Any assets transferred within 36 months prior to application will be considered available if they were transferred for less than their value (except for transfers to trusts for which there is a 60-month "lookback" period).
  • Assets of married couples, however, receive special treatment so that the spouse who remains living at home will not be unduly impoverished. Such a non-institutionalized spouse is permitted to keep one-half of all of the available assets (up to a federally-established maximum) and is allowed to keep a substantial portion of the income of the couple in order to provide for support expenses at home.
  • In addition, there are certain resources that are considered non-countable for eligibility purposes; these include the family residence, household contents, a vehicle, a prepaid burial fund and other necessary items.
  • It is important to be aware of the specific eligibility provisions and exemptions so that assets will not be wasted before applying for Medicaid.

Finally, it is important to know that there are appeals processes built into the Medicaid system. If you are unhappy with eligibility determinations, care decisions or placements made under Medicaid, there is a process for an administrative review, an administrative hearing and even court proceedings to enforce your rights.

Where To Go For Help

There are several books published concerning the Medicaid program and its rules and you should check your library or bookstore for current titles. Keep in mind that the Medicaid laws and rules are constantly changing so make certain that whatever you read is up to date. There have been major changes in the Medicaid program during the last few years.

Many elder law attorneys have extensive training and experience concerning Medicaid and have been advising clients and their families for many years. Much of the planning done by older persons concerning Medicaid has been done with the help of such experienced attorneys. It is important to see such an advisor as soon as possible to enable the greatest benefit from such planning.

Long-term care insurance (covered in another Law and Aging Series booklet) is one way of preparing for the expenses of long-term care and should be considered. Such insurance is not available for everyone and will not be available once a disabling long-term illness has struck.

Family support groups and organizations such as the Alzheimer's Association and the American Association for Retired Persons provide assistance and often have literature available. Local Area Agencies on Aging (pursuant to the Older Americans Act) also have comprehensive advice and literature available concerning Medicaid. The state Medicaid Eligibility Office is also a good source of basic information about the program, its services and the requirements for eligibility.

Because the law is so complex, attorneys are a particularly appropriate source of advice. Your attorney can assist you in planning for the expenses of long-term care as well as planning for the protection of resources for the rest of the family.


Click here: Mr. Long-Term Care
SeniorLaw Home Page
HCFA - The Medicare and Medicaid Agency


In an effort to keep our mailing list up to date, we would request that anyone who changes their screen name (if on AOL) or e-mail address please advise of that change. The names are batched and when a name has changed, it delays the mailing. If you would not like to receive The Ribbon any longer, please advise us of that too. Those of you who are not on AOL but have the Instant Messenger downloaded, need to advise us of your correct e-mail address.

The correct address will keep The Ribbon coming to you in a timely manner.


A "Gathering of Friends" is being planned for October, 1999 in Nashville, TN. If you are interested in attending, please send an email to either LIZA 513 or Russell363 requesting information. A new mail list will be formed so updates can be sent out as necessary to those who are interested.

The deadline for requesting information and sending your response (yes, no, or maybe) is October 31 of this year. A final commitment date will be much later.

Those who are already aware of this event are excited that we all may be able to meet and give our hugs in person. Hope to see you there.

We'd like to remind you of The Ribbon website. We hope you have been making use of the chat room, the Dedication Garden, and signing our guestbook. Pass the word around to those you know who might need information that they can check it out at Welcome to The Ribbon (

Book Reviews

From Rhonda1872

I highly recommend the book "The Notebook" by Nicholas Sparks. It is a book that really tugs at your heartstrings. It's about Noah, an old man in a nursing home that visits an old women with alzheimers everyday. He goes to her room with his precious notebook and reads her the story of two people who fell in love, who were separated years later, but who overcame the odds. Everyday he hopes for the miracle that will bring back her memory.

It can be found in hardback and paperback. It is a rather short book (similar in length to Bridges of Madison County)


From VWeber491

FYI - I ran into a wonderful novel the other day where the main character has AD. It is called "Shades of Grace" by Barbara Delinsky. It is a couple of years old. There is just enough romance (the daughter falls for the doctor) to lighten things up - but the descriptions of how Grace's mind is working (or not depending on your outlook) is very revealing. I thought you might want to pass on this gem to other readers in the group.


E-Mail Box

From VWeber491

great article about Meal Time Tricks and husband has found that the best way to get his mom to eat at a local seafood place is just to do an appetizer sampler...that way she doesn't have to deal with forks and spoons unless she really wants the clam chowder, or big meals, the portions are small enough so as to not overwhelm her, and there is enough variety to tempt her even when when her appetite seems to be off. Of course everytime they go there she has to ask what "that calimari stuff" is (again), but she cleans the plate!


From Mewaterbro

This comment was extremely helpful to me. My mom is in a small group home care facility and when I hear all the stories of the people who are caring for their loved ones at home, I DO feel guilty. But it is true that I am the one overseeing the care, and providing companship, and there for the occasional emergencies.

Several of your readers in this issue wrote in about how to deal w/ the frustration of the repeated questions that you have just answered 18 times. I would love some help with this also. Also, my mom is functional enough to call me on the phone once or twice a day...and what am I supposed to say? I wish my life were exciting enough to support that much conversation, but it just isn't. I've found lately my fuse is very short and I am losing patience with her much more than I would like. I am not very proud of myself, but have not got my temper under control quite yet.

Anyway, those are a few of my current responses and concerns. I am so glad to have discovered your newsletter and hope to make it to more chats.

Thanks for all your wonderful work.


From Phydeau

Just want you to know how important the newsletter is to me, and how much I look forward to receiving it. Before the newsletters, and the sharing of other members' problems, I felt so alone and lost dealing with Hubby's problems. Now I realize that we are still very fortunate that his problem has not progressed to point of desperation and the required making of tough decisions regarding his care. Putting the newsletter together is time consuming, I know, but be assured that you are doing a wonderful service for so many of us. Best wishes and many thanks. Beverley

From Momi1knobi

Our cat died this summer. We were planning a trip so did not get another cat immediately. Mom started rubbing her right hand. She rubbed all the skin off and made a sore place. I had a doctor's appt. so asked him about it. He said to put a bandaid over it so she wouldn't rub it. We had it just about healed when she went to NM for a week. When she got back, the place was twice as big. Evidently she was stressed while she was there & kept rubbing.

When we all got back home, we got another cat. It's a kitten & Mom enjoys watching him play. The rubbing has stopped. We did a follow up appointment with her doctor--he asked her didn't that hurt when you rubbed it? She said, "Yes." He asked her why she didn't stop rubbing it then. We joked that I wasn't around that week to tell her to stop. I had gone to Missouri to see my son in the army.

Everything is okay now. Her hand is healed because now she can pet the kitten instead of her hand.

Enjoy the ribbon, good work!



Thanks for putting me on the EMail list for "The Ribbon". It was very interesting and I look forward to future mailings. I probably won't be in group much if at all the next week or two. Going through a divorce, spliting property and making plans to sell the house and move is taking an incredible chunk of my days.

I did want to make a comment to the article by Karyn regarding meal times. My mother doesn't like to sit in the dining room at the nursing home she's in because she's extremely paranoid and there is something wrong with everyone. And she doesn't have much of an appetite. She spends most of her days walking the floors and naps here and there on a chair or sofa. To make sure she eats they give her finger foods she can carry with her as she walks. Sandwichs, fruit, a rolled up piece of cheese with a bit of meat in it, things like that. They are giving her food all day long so she ends up eating more than she would just at mealtimes. She's actually gained weight since she's been at this place. They also give her milkshakes to make sure she gets enough calcium. They put a straw in everything she drinks so she doesn't have trouble trying to hold a glass and tip her head back.

That's it for now. Back to the drugery of it all here.

... Lynzie

From Cat1116

Thanks Karen. I'm glad you wrote. This whole mess is too much for me to deal with. My Dad is constantly taking things personnaly, gets upset at everything and is continuallly on a self-pity pot. My understanding is there, my patience isn't. I am trying to get some help in here with me so I'm not here 24 hours a day. I'm sure that would help some. I haven't even been allowed the time to grieve for my Mom who passed away in December. I was just catapulted into this position without any knowledge. I'm angry with my Mom too, for covering this up. She only said that it would be hell for me when she died and boy was that an understatement. I am their only child and adopted so there isn't much family to work with. My son has been my greatest inspiration and right arm throughout, I thank God for him. But he is only 21 and I feel it isn't to fair to have him swallowing so much of the burden. Well, I know that all of you are out there and that is comforting. I've spent many years in an AA support network so understand that reaching out is what it takes. My thanks, my thoughts are with you.

Mary Jane

We hope you all have a safe and restful Labor Day..

See you in the chats,

Karen (KMenges581)
Jamie (DrMOM1955)

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