high cost of nursing home care

Planning for the High Cost of Nursing Home Care

Have you made a plan to deal with the high cost of nursing home care?  If not, you need to look into how an Elder Care law firm can help you protect you and your family.  We often hear about how important it is that we plan for the future.  Whether it is business planning, legacy planning, or retirement plans, professionals remind us that it is vital to be prepared for uncertainty.  With over half the population expected to one day require long-term care in a nursing home or other care facility, financial planning to assist with these costs is more necessary than ever before.  Our legal team can help you to prepare for that possibility.

Recognizing the High Cost of Nursing Home Care

Although it does not always receive the media coverage it deserves, nursing home costs are something about which every American should be concerned.  Almost everyone knows someone who is either receiving nursing home care or will require such care in the future.  Costs have been exploding for many years, and now average more than $200 a day across the United States and more than $300 a day in Florida.  And while those costs have some justification, the fact remains that few seniors have an extra $9000 to $12,000 a month in income that can be used to pay for care.  Recent estimates suggest that half of American adults do not even have $10,000 in retirement savings.

Medicaid and Long-Term Care Coverage

The Medicaid program provides long-term care coverage for those who need help meeting the high costs of nursing home care.  Since its creation, the program has expanded its coverage to the point where it now serves as the single most important payment source for the country’s nursing homes.  Without Medicaid, millions of American seniors would be unable to afford the cost of care and would find themselves struggling to cope with their health care and daily living needs.

Why is there a Need for Medicaid Planning to Address the High Cost of Nursing Home Care?

Now, you might wonder why there would be any need for planning if Medicaid can cover those costs.  After all, the program was designed to help low-income Americans get health care coverage.  The problem is that the Medicaid program’s eligibility standards include limits on both assets and income.  Many seniors struggle to meet those limits.  If a senior has “too much income” for Florida Medicaid rules he may still be far short of having so much income that he could afford the monthly costs of a nursing home.  These seniors can deal with the income limit by contacting an attorney to set up a Qualified Income Trust.  The trust will apply excess monthly income to the nursing home in a way that enables an applicant to meet the eligibility cap. Both for preparing and understanding the Qualified Income Trust, the senior will need an attorney.

What are Alternatives to Medicaid Planning?

Of course, you do not have to plan for nursing home costs.  We are all free to ignore the warnings and simply wait until we know that we need care.  It is important to remember, however, that waiting for the need to manifest in that way can leave us with fewer planning options when it comes to securing the benefits we need.  Emergency planning options do exist but they will result in fewer assets protected and can even leave some seniors with almost no legacy to leave behind for their spouse and children.

What if I Don’t have a Medicaid Plan?

For instance, seniors who have failed to plan for Medicaid eligibility are often forced to spend down assets in ways that might prevent them from following through on their inheritance planning.  They may need to spend money on home upgrades or a new car just to divest enough wealth, rather than passing that wealth on to their heirs.  Others can even make the mistake of trying to shield assets by transferring them into a loved one’s name-something that can trigger an ineligibility penalty under the program’s five-year look-back period.  The exact penalty is determined by the total amount of those transferred assets and the average costs of nursing home care in the area.

The best way to avoid those consequences is to start early with your Medicaid planning.  Our Elder Law attorneys can help you to prepare a strategy that will insure that your assets are properly organized in a way that facilitates your eligibility for the program benefits you may one day need.  Using effective strategies and tools like irrevocable trusts (also subject to the five-year look-back) you may safeguard assets from creditors, certain tax liabilities , and the high costs of nursing home care.  More importantly, you can protect those assets and ensure that they are available to be passed on to your heirs when you die.   If you are currently in need of nursing home care, some tools may not be available.  But there may still be planning strategies that are appropriate for saving some assets from nursing home expenses.  Remember too that a married applicant has more planning options by using the well-spouse’s resource allowance.

Just do not fail to plan!

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