For many different reasons, people find that their best option is to move into a long-term care facility. There are several different types of facilities. Some of them are for end-of-life care; others are retirement communities. Within those distinctions there are assisted living and independent living communities. All of them have different care options that could be appropriate for different situations. One thing they have in common is that they can be expensive.
Protect Your Assets
70% of senior citizens receive some kind of care. Typically, long term care lasts for an average of three years. In many states, the average cost of nursing home care is close to $100,000 a year. So, if you stay in a care facility for the average amount of time, it could cost you $300,000. Even if you have that amount of money in your savings, you don’t want to spend all of it. That’s especially true if you have a spouse or a loved one who stays home while you’re in long-term care. If you don’t protect your assets, the care facility might attempt to deduct all of those expenses from your assets and your accounts. That would leave your loved ones nothing to live on and no assets for your heirs.
Standard health insurance, including Medicare, does not pay for stays in care facilities. For that, you need long-term care (LTC) insurance. Very few seniors have this type of care because it can be expensive. Also, the underwriting standards have become increasingly strenuous. Lastly, the premiums have been rising in recent years. However, if you plan ahead, and apply while you’re healthy, some LTC whole life policies are well worth considering as part of your retirement plan.
But if you’re facing an immediate need for long term care, Medicaid may be your best option. The application process can be challenging, but an elder care attorney will be able to help you qualify through several different methods.
Medicaid is a needs-based program, which means that they have to assess the assets and income of you and your spouse own to determine if you are eligible. This is known as the snapshot date because they take a figurative snapshot of your financial state. So, many senior citizens use their assets to pay off outstanding debts. For example, if you and your spouse have $50,000 saved but medicaid says you can only have $25,000 to qualify for the program, you might spend $25,000 paying off the mortgage on your home. That would put you at the threshold to qualify for medicaid. There are a variety of other options to qualify and this process is sometimes called the “spend down.”
Selling off or transferring ownership of assets is another option, but the five-year look back rule can lead to a penalty, which may jeopardize medicaid eligibility. Moving ownership of assets to your children before filing for Medicaid is especially dangerous and such transfers are carefully scrutinized.
If you have questions about your particular situation, call an elder law attorney. Boise Medicaid attorney Corey McCool, offers a free one hour consultation!