Alzheimer’s Treatments and Does Medicare Cover Long-Term Care?
By Zeke Anders on February 6, 2024
Despite the headlines which claim life expectancy has declined, life expectancy has improved over past decades. People are living longer which is a blessing, but that has contributed to an increase in cases of dementia, such as Alzheimer’s. Scientists have been searching for treatments for Alzheimer’s for years, and finally last year there were some breakthroughs.
Per the below transcript from The Long View podcast, a drug for treating Alzheimer’s, called Leqembi®, was approved last year. The drug does not cure Alzheimer’s, but it appears to slow the progression of the disease when discovered early. The exact benefit is hard to quantify. Medicare will cover the treatment, which has a cost of $26,500 per year, of which retirees will be responsible for a 20% co-pay, or $5,200 per year. Individuals will have to weigh the costs and risks of the drug against the potential benefits.
The podcast also touches on paying for long-term care. A common misconception is that Medicare pays for long-term expenses. Unfortunately, it does not. Original Medicare will pay the full costs of skilled nursing care for 20 days only after you spend 2 days in inpatient hospital care. For days 21-100 retirees will have a daily $200 co-pay, and Medicare will pay the rest. Beyond day 100, retirees are responsible for the full cost of skilled nursing care. That only covers roughly 3 months.
What confuses people is that Medicaid does cover long-term care. Medicare is the federal program that provides health insurance for all retirees. Medicaid is a program for low-income individuals and families that is administered by each state. To be eligible for Medicaid, individuals and couples must first spend down most of their liquid assets, generally down to just $2,000 in a checking account. They may retain one vehicle, and a primary residence may be excluded depending on the circumstances. There’s also a 5-year lookback period for assets transferred away, such as to a family member. There is a limit on income, as well. As such, planning for Medicaid to cover long-term care is often unattractive to individuals with significant assets.
The bottom line is that it is important to have a plan for long-term care, as Medicare will not cover it and you may not be eligible for Medicaid.
https://www.morningstar.com/retirement/are-latest-alzheimers-treatments-worth-cost
The full podcast is worth a listen if you would like to learn more about long-term care. It can be found on Apple Podcasts or Spotify, or at the link below.
https://www.morningstar.com/podcasts/the-long-view/20b45013-f02a-4f2d-9b2e-de35357c6330
Zeke Anders – Planning Specialist | zanders@twickenhamadvisors.com
Disclaimer
Securities are offered through Hightower Securities, LLC member FINRA and SIPC. Hightower Advisors, LLC or any of its affiliates do not provide tax or legal advice. This material is not intended or written to provide and should not be relied upon or used as a substitute for tax or legal advice. Information contained herein does not consider an individual’s or entity’s specific circumstances or applicable governing law, which may vary from jurisdiction to jurisdiction and be subject to change. Clients are urged to consult their tax or legal advisor for related questions.
