Are you covered for long-term care? Do you realize that neither Medicare nor the "Medigap" policies pay for nursing home care? Then who does pay for nursing home care?

According to the July, 1997 Public Citizen Health Newsletter, at the end of 1995, Medicaid paid for the care provided to between 50 to 60 percent of the long-term care residents in nursing homes. Personal assets paid for another 30 to 40 percent of the residents whereas private insurance paid for less than 10 percent.

Medicaid pays the nursing-home bills of the truly poor, of those who have shifted assets sometime prior to admission to a nursing home, and of those who spend down to Medicaid eligibility after admission to a nursing home as a self-payer. It does not take long to spend down given that nursing home costs range from $30,000 to $90,000 per year.

The government has tried to slow down the shifting of assets, but early efforts failed. However, the Republican-led Congress last year put a provision in a bill on health insurance coverage that made it a criminal offense to shift assets in order to attain Medicaid eligibility. Strange, but no member of Congress claims responsibility for this provision. It just happened.

As a result of this provision and a new tax break introduced for the purchase of insurance for long-term care, things look even brighter for the insurance industry. However, as Public Citizen pointed out, very few people would actually be able to take advantage of the tax break. In addition, long-term care insurance is very expensive, and it can only be used for certain conditions. To be able to receive the benefits of the insurance, a person must either have Alzheimer's disease or a similar form of senile dementia or need assistance with two or more of the six "activities of daily living" (ADLs). Based on a review of brochures from several insurance companies, Public Citizen found that some of the companies eliminated the ADLs that cause most people problems from the list of ADLs. This makes it more difficult for persons to receive their insurance benefits.

If you believe that long-term care coverage is for you, be extremely wary. Read the policy very carefully with a friend before you sign it! Make sure that all six ADLs are listed. Remember that the insurance agent makes a commission whether or not the policy meets your needs.