If you are thinking that you have always been healthy, so it is unlikely that you will require nursing home care, you should understand some of the facts. Looking ahead toward your active retirement years that will be full of travel, leisure activities, and quality time with your family is a beautiful thing. Indeed, your golden years can be some of the best years of your life if you plan ahead carefully from a financial perspective so you have the resources that you need.
This being stated, you should definitely consider the eventualities that you may face when you enter into your twilight years. The expected lifespan for someone that is turning 67 today is at least 85, and about 40 percent of people that are 85 years of age and older have contracted Alzheimer’s disease. Many Alzheimer’s sufferers ultimately reside in nursing homes, and of course, there are other reasons why people need nursing home care toward the end of their lives.
You will qualify for Medicare when you reach the age of 65 under existing laws. That’s the good news, but the bad news is that the Medicare program does not pay for a stay in a nursing home. The type of care that is received in these facilities is considered to be custodial care, which is not covered. This is a very big deal, because nursing homes are expensive, and experts expect the costs to rise over the coming years.
Albany, New York Nursing Home Costs
Genworth Financial is a company that offers financial products for senior citizens and people that are looking ahead toward their elder years. They do a great deal of research every year to keep a finger on the pulse of the state of long-term care costs in the United States. The most current figures that they have published on their website are for 2017.
We have an office in Albany, New York, so we will look at the figures for this area. Last year, the median annual charge for a private room in an Albany nursing home was $140,525. Genworth anticipates a three percent per year increase in the this figure over the next five years.
If this upward trajectory continues indefinitely, you could be looking at a much larger number if you need nursing home care 20 years from now. Plus, if you are married, you can multiply long-term care expenses by two. Clearly, nursing home costs could consume all or most of the legacy that you would like to pass along to your loved ones if you have to pay out-of-pocket.
There is a widely embraced solution in the form of the Medicaid program. This jointly administered federal/state government health insurance program will pay for nursing home care if you can gain eligibility. It is a need-based program, so there is a low asset limit that you must be able to stay within to obtain eligibility. In many states, it is just $2000, but in New York it is quite a bit higher. The Medicaid asset limit in the Empire State is $15,150 at the time of this writing.
Fortunately, there are some assets that are not considered to be countable. If you own a home, it is not a countable asset, but there is an equity limit that stands at $858,000 during the current calendar year. However, if there is a healthy spouse remaining in the home, there is no equity limit at all. An applicant can retain ownership of one vehicle, and wedding rings, engagement rings, and heirloom jewelry are not counted. Personal effects, household goods, and unlimited term life insurance are allowed, but whole life insurance is limited to just $1500.
When it comes to the assets that are counted, you could engage in a process called a Medicaid spend down. This will typically involve giving gifts to your loved ones. However, you have to plan ahead carefully, because timing is everything. You are penalized, and your eligibility is delayed if you give away assets within five years of the submission date of your application for Medicaid coverage.
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As you can see, nursing home costs are a looming threat, but there are steps that you can take to prepare yourself in advance. If you would like to discuss things with one of our elder law attorneys, we would be more than glad to help. You can click this link if you would like to send us a message requesting an appointment, and we can be reached by phone at 518-389-6020.