How do we pay for long long term care?
The high cost of long-term care has made planning a critically important issue for most 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 burdens it places on their family’s hard earned savings. Financial devastation looms large for a family facing ongoing care at a rate of $13,000 or more per month.
Our firm routinely works with individuals, and their caregivers, to guide them through the challenging financial and legal decisions which occur as they grow older and require ongoing care. While there are significant federal and state benefit programs which were designed to assist the elderly, far too many people fail to understand how these programs function and what is required for eligibility. We work closely with our clients to ensure they have an understanding of the many legal options to protect assets and qualify for benefits that will help pay for long-term care.
Yana says: “There are four ways to pay for long term care:
- Self-pay, either from money in the bank or by having your family members disrupt their lives and careers to provide care for you.
- Long term care insurance is a great option, but it can be too expensive or hard to get. Even if you have LTC insurance, how much care will it cover? Might you STILL need Medicaid when it runs out?
- VA benefits – will only cover certain Veterans and their surviving spouses.
- Medicare does NOT cover what is called “custodial care”. Except for some rehab after a hospitalization or some skilled nursing care after you go home for a few hours a day for a few months. Medicaid is usually the only program that you can look to in order to cover the cost of long-term care.”
$400-$450 per DAY is the cost is a nursing home in New York City. If you receive care at home, your money may go further. You may not need to spend money, but your child or relative may need to quit their job or give up their home in order to provide you with care. None of these are very attractive options for most of our clients.
Long-term Care Insurance
While some seniors are able to afford private care, the cost of long-term care can easily wipe out savings of all but the wealthiest families in a matter of years. Those who have planned ahead by purchasing long-term care insurance have a degree of certainty and peace of mind, knowing that they have a lesser need to rely on other sources in the future. Unfortunately, many can’t afford the high cost of long term care insurance or worse, because of age or medical conditions, cannot qualify for long term care insurance. If you do have long-term care insurance, you should be aware of what your policy covers. Many policies have high deductibles or provide for only a short period of care in a medical facility. In fact, many who have long-term care insurance still have to resort to Medicaid to pay for their care.
Veterans and their surviving spouses who are eligible for a VA pension and require the aid and attendance of another person, or are housebound, may be eligible for additional monetary payment. These benefits are paid in addition to monthly pension, and they are not paid without eligibility to Pension. http://www.benefits.va.gov/pension/aid_attendance_housebound.asp
The final option to cover the cost of 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. It is our opinion that New York States has one of the most comprehensive Medicaid programs in the country.
Yana says: “Many people do not know that with careful planning they may position themselves to be Medicaid eligible in the event they require long-term care, either in a nursing home or at home.”
There are strict income and resource guidelines which a Medicaid applicant must meet in order to qualify. In New York State, a single applicant’s “countable resources” cannot exceed $14,850 (a couple cannot exceed $21,750). Certain assets, such as the primary residence and pre-tax retirement accounts may be exempt from the calculation of resources. PROVIDE LINK TO MORE INFO Further, the Medicaid Applicant’s income cannot be more than $825/$1,209 per month. Although this limit is very low and would prevent most of our clients from being eligible for Medicaid, there is a very simple solution called a Pooled Income Trust or Pooled Supplemental Needs Trust. PROVIDE LINK TO INFORMATION ABOUT POOLED TRUST ON THE MEDICAID APPLICATION PAGE Our attorneys will work with you and your family so that your loved one may qualify for Medicaid.
While Medicaid eligibility with respect to long-term care was not overly restrictive in the past, there has been a steady drift towards more complex and limiting 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 a myriad of regulations involving look-back periods, income caps, transfer penalties and waiting periods to plan around. Here at Yana Feldman & Associates, PLLC, we are experienced in designing a Medicaid Plan that will help ensure you qualify for coverage and will not have to exhaust all your assets to meet the great expense of long term care.
Far too often, seniors wait until they fall ill and require care to seek the assistance of an attorney. Unfortunately, in waiting for a crisis, seniors and their caregivers often encounter more hurdles for qualification and exorbitant levels of stress during an already difficult time. Our attorneys routinely assist clients with pre-Medicaid planning, developing a long-term plan which seeks to protect assets through traditional estate planning functions (asset protection tools such as trusts, life estates and annuities) while coordinating private insurance, veterans benefits and other resources which may be available to pay for future care, without draining all of the family’s assets.
During your intake, we will discuss your specific family needs and concerns, your income and your assets in order to create the most effective Medicaid Plan for you. We will consider several strategies, including sheltering your assets in a manner that results in Medicaid treating them as non-countable, or exempt. Estate Planning and Medicaid Planning intersect, as most often the motive for asset protection is the availability of assets to provide a legacy for your family members. If you have a spouse, we will help you to maximize the benefits of your Medicaid Plan for your spouse, and help to ensure that he or she retains your marital assets to the fullest extent of the law.
We understand that sometimes the need for long term care arises without a Medicaid Plan being in place. We can help you, or your loved one acting on your behalf, to apply for Medicaid as of the time you require long term care. The rules are complex, and include what is known as a five-year look-back for coverage of nursing home care services. (There is no look back for home care services.) Even without a pre-existing Medicaid Plan, we are usually able to preserve at least 50% of an individual’s assets if they must enter a nursing home. There are a number of complicated rules as to what is or is not an exempt transfer that does not cause any period of eligibility. LINK HERE TO APPLICATION RULES
Yana says: While there is a FIVE YEAR look back on all transfers made for less than fair market value if you apply for Medicaid to cover the costs of nursing home care. Any such transfers can cause a period of ineligibility called the “penalty period”. However, there is NO LOOK BACK period and NO “PENALTY PERIOD” if you apply for “Community Medicaid”, which can cover up to 24 hours a day of care at home!
The potential value of Medicaid Planning can add up to thousands or hundreds of thousands of dollars in long term care savings. With our expert guidance, you can rest assured that the Medicaid Plan we create for you will provide for your long term care and safeguard your assets for your family’s benefit.
Helping You Qualify for Medicaid
Even if you haven’t taken time to plan for Medicaid eligibility, there are a number of tools at your disposal to obtain eligibility. Our firm routinely assists clients who are just starting the process and need to qualify immediately. In these situations, we work directly with seniors, caregivers, social workers, care facilities and healthcare providers to identify the best environment for your ongoing care. We work with you to complete the Medicaid application, transfer or retitle assets, and when necessary, “spend down to qualify” in a meaningful way which won’t waste your hard earned assets but instead benefit your loved ones for years to come.
Our law firm has the experience and knowledge to help you avoid the financial ruin associated with the high cost of long-term care. Contact us today to learn more about the issues surrounding Medicaid eligibility and to begin the planning and application process.