As elder law attorneys, we are focused on the concerns of senior citizens and their families, and long-term care is at the top of the list. In this post, we will look at five important facts that you should fully understand so you can take the necessary steps to prepare yourself.
Most Seniors Will Need Living Assistance
We all know that some elders reside in nursing homes, and there are those that receive the help that they need in their own places of residence. However, the probability statistics surprise many people.
Seven out of every 10 people that are turning 65 on any given day will need some type of help with their activities of daily living. More than one third of elders will move into nursing homes eventually.
Medicare Will Not Help
The vast majority of senior citizens qualify for Medicare when they reach the age of 65. There are co-payments, deductibles, and premiums that must be paid out-of-pocket, but most people that have prepared for retirement can handle these expenses.
Unfortunately, the one gap that is not easy to manage is the long-term care void. Medicare does not cover a stay in a nursing home or in-home care that is provided by a professional home health aide.
Nursing Homes Are Very Expensive
It is not easy to get out a checkbook and pay for nursing home care out of your own pocket. In our area, you can expect to pay over $125,000 for a year for nursing home care, and the costs have been going up.
An in-home health aide would be another option, but this type of care is quite expensive in its own right. According to Genworth Financial, the median annual charge for a home health aide in the Essex Junction area was $62,920 in 2019.
Medicaid Does Cover Nursing Home Care
Medicaid is the widely embraced solution, because this jointly administered federal/state government health insurance program will pay for custodial care. Since it is a need-based benefit, you cannot qualify if you have more than $2000 in your own name.
That’s the bad news, but the good news is that some pieces of property do not count. Your home is exempt, but there is a $595,000 equity limit in 2020. This figure is adjusted annually to account for inflation, and a 2021 update should be released soon.
Wedding rings, engagement rings, and heirloom jewelry are not counted, and Medicaid does not consider your household items or your personal belongings.
You can have one vehicle and up to $1500 in whole life insurance. Unlimited term life is allowed along with as much as $1500 set aside for final expenses, and prepaid burial plots are not counted.
We should point out the fact that there is also a Medicaid waiver program that will pay for in-home care.
Spending Down and the Five-Year Look Back Period
To remove countable assets from your name for Medicaid eligibility purposes, you could convey them into an irrevocable trust. You would not be able to act as the trustee or touch the principal, but you would be able to receive distributions of the trust’s earnings.
The key is to plan ahead effectively, because the trust must be funded at least five years before you apply for Medicaid coverage.
Attend a Free Webinar
We offer webinars on an ongoing basis that cover nursing home asset protection and important estate planning topics. There is no charge to attend these sessions, and they couldn’t be any more convenient, so this is a great way to invest a bit of spare time.
You can see the dates if you visit our webinar page, and when you identify the session that you would like to attend, follow the simple instructions to register.
Need Help Now?
If you already know that it is time for you to discuss your goals with a licensed attorney, we are here to help. You can send us a message to request a consultation appointment, we can be reached by phone at 802-879-7133.
Wendy now works with clients on estate plans, including Trusts, Wills, Powers of Attorney, and Advanced Directives.Wendy also assists clients with Medicaid Planning and helps clients to qualify for Medicaid assistance.Wendy is a member of the Vermont Bar Association and both the national and Vermont chapter of the National Academy of Elder Law Attorneys.
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