PLANNING LONG TERM CARE
One
of the greatest concerns of Senior citizens is spending their “golden years’ in
a nursing home. The drastic change in lifestyle is compounded by the
overwhelming cost of long term care. Not many people can afford to pay for
nursing home costs out of their regular income, and as a result, it does not
take
long to spend an entire life savings. In the
home cost is $124.00 per day, $3,720.00 per month, or $44,640.00 annually,
according to Sheldon Marketing Services.
Protecting
your estate for your spouse or children requires careful planning.
Understanding the Medicare and Medicaid benefits to which you are entitled or
purchasing long term care insurance may help to preserve your assets. Long term
care insurance is too expensive for many people, and if a person already has an
illness or disease, he or she may not be insurable at any age. Many are under
the
mistaken belief that Medicare will pay for all of their nursing home expenses,
but
Medicare pays for only a small portion of the nursing home care provided in
this
country. This is an unwelcome surprise to many families.
Those
that are unfamiliar with the Medicaid program often confuse Medicaid with
Medicare. Although their names are similar, Medicare and Medicaid are very
different programs. Unlike Medicare, which is a federal program, Medicaid is a
joint federal and state program administered by each state. Eligibility rules
vary
somewhat from state to state although each state must conform to the federal
guidelines to receive federal money. Basically, Medicare is a health insurance
program for individuals 65 years of age and older. It also covers some
individuals
with disabilities under 65 and certain situations in which a person with
permanent
kidney failure requires dialysis or a kidney transplant. All retirees who
receive
Social Security benefits also receive Medicare as their health insurance.
Medicare
is an entitlement program, while Medicaid is a needs based program.
Medicaid is designed to help individuals on limited incomes and with limited
resources with their medical expenses. Medicaid provides for nursing home care
for individuals who have exhausted their financial resources. Generally,
Medicare
will pay for 20 days of full coverage if you go into a nursing home and receive
skilled care, as opposed to intermediate care after at least 3 consecutive days
in
the hospital. If after 20 days you still need skilled care, Medicare will pay
for partial
coverage for up to 80 more days. The definition of “skilled care” and other
conditions for obtaining coverage are narrowly defined, so that few nursing
home
residents receive the full 100 days of coverage. After the 100 days have
passed,
paying for the nursing home bill is up to you to pay out-of-pocket, i.e. from
your
regular income or savings; unless you have long term care insurance or you
qualify for Medicaid. Nursing homes are not required to participate in the
Medicaid
program and may require all of their patients to pay privately. If a nursing
home
does participate in Medicaid, it must agree not to charge the qualifying
recipient for
any
services provided if the medical services are reimbursed by Medicaid. When it
becomes apparent that a person will need nursing
home care, frequently family
members ask friends and neighbor how to get Medicaid to pay for the cost. It
is not
easy to get clear answers and the different requirements from state to state
may
result in the internet providing even more confusion.
As a rule of thumb in
social worker will tell you that you will not qualify for Medicaid until your
resources
are exhausted. In
or other non-exempt assets to be eligible. Assets considered to be exempt that
do
not effect a person's eligibility include but are not limited to: personal
belongings of a
reasonable value, a motor vehicle of $4,5000.00 unless altered for medical pur-
poses, a prepaid funeral plan (subject to certain limitations), and $1,500.00
face
value in life insurance.
An at home spouse can additionally keep a maximum of
$90,660.00 in assets plus
the family home, furniture, personal property in the home,
and a vehicle.
additionally, an at home spouse can keep income of about $2,330.00 per month.
Giving general rules for "Medicaid planning" is
difficult because each person's
situation is different. Some people have retirement assets; some have savings,
retirement income or social security. Other folks are married and some are
single.
Some own their own home while others rent. Some folks are providing for an
adult
disabled child.
Consult with an attorney familiar with this area who
knows the different planning
tools and strategies used in Medicaid planning. One of the factors to consider
in
planning for Medicaid is that state Medicaid officials look at transfers made
within 36
months before making a Medicaid application. Planning ahead by having specific
estate planning documents in place that authorize Medicaid qualification can
help
your family provide the best care possible for you and preserve some of the
family
assets as well. Even in a crisis situation, there may be planning techniques
that can
be used.
Remember that
some ways that are similar but in other ways that bring about results that are
quite
different. This is a complex area of the law and should only be handled by an
attorney
who knows Medicaid law. Your best bet is to consult with a law firm that has
experience
and is a member of the National
Association of Elder Law Attorney's (see their
website at www.naela.com).