As our population ages, more and more of us confront elder law-related issues, whether for ourselves or our parents. One of the most pressing issues is long-term nursing home care, which usually is not covered by traditional health insurance. Depending on where you live and the level of care needed, nursing home care can cost from $35,000 to $150,000 a year. The average stay is slightly more than three years. Most people end up paying for nursing home care until their personal (or family) assets are depleted, then they may qualify for Medicaid to pick up the cost.
Long Term Care Planning
"Long-term care" describes the help needed by people who have problems living independently because of chronic medical problems or severe disabilities. Most long-term care is provided by family members and friends. Local communities offer services like Meals-on-Wheels designed to help older people and people with disabilities remain in their homes. In-home care ranges from respite care which gives family caregivers a break, to housekeeping services, to visits by home health or personal care aides, to 24 hour care. Costs vary according to the amount of time and the type of provider.
Who should plan for long-term care?
It is difficult to predict who will need long-term care. The need for assistance with some of the basic activities of daily living (such as preparing meals, doing housework, bathing, dressing, eating) in addition to taking medication, and managing money increases with age. More than half of the people age 85 or older report difficulties with some of the activities of daily living. A serious decline in function (which can be caused by a physically disabling condition or by Alzheimer's Disease or dementia) is the major factor that determines whether someone will enter a care facility. Some types of planning, such as preparing advance directives and revocable living trusts, or purchasing long-term care insurance, work best when they are done well in advance.
The high cost of long-term care has made planning a critically important issue for many seniors and their families. In fact, most seniors will likely require some form of long-term care. Sadly, many of them are unprepared for the significant financial burden it places on their family’s hard earned savings. It could be financially devastating for a family facing ongoing care at a rate of $7,500 - $12,000 or more per month.
Careful planning, however, can help protect your assets, whether for your spouse or for your children. One of the best approaches is to purchase long-term care insurance while you are healthy enough to qualify, and to make sure you receive the benefits to which you are entitled under Medicare and Medicaid.
Clients are frequently confused over the differences between Medicare and Medicaid. Though their names are very similar, the programs are quite different. Medicare is an entitlement program, a federal health insurance program in which most people enroll when they turn 65 years old. There are no financial qualification rules. Medicare has two primary parts: Part A and Part B.
Medicare Part A covers in-hospital care, extended care after a hospital stay, some home health care services, and hospice services. The rules for nursing home coverage are very strict and, in fact, Medicare pays for less than 9 percent of nursing home care in this country.
The other option to pay for long term care is Medicaid. A joint federal-state program, Medicaid provides medical assistance to low-income individuals, including those who are 65 or older, disabled or blind. Medicaid is the single largest payer of nursing home bills in America and serves as the option of last resort for people who have no other way to finance their long-term care. Although Medicaid eligibility rules vary from state to state, federal minimum standards and guidelines must be observed. While Medicaid eligibility with respect to long-term care was not difficult in the past, there has been a steady drift towards more complex and restrictive rules, the latest being the Deficit Reduction Act of 2005 which went into effect in 2006. These changes have resulted in complex eligibility requirements for those in need of Medicaid benefits. It’s no longer as easy as reviewing one’s bank statements. There are countless regulations involving look-back periods, income caps, transfer penalties and waiting periods to plan around. Our law firm has the experience to help avoid the financial ruin associated with the high cost of long-term care. Contact us today to start the process of understanding the issues surrounding Long-term care planning and/or Medicaid eligibility and begin implementing the planning and application process.