As elder law attorneys, we focus on legal and financial issues that are of interest to senior citizens. There are a number of them on the table at the present time, and the matter of long-term care is at the top of the list.
If you are assuming that you will always be able to get by, even if you need some help from family members, you should understand the facts.
Longevity statistics can help you understand the risks, even though they are not very pleasant to contemplate. Once you reach the age of 67, your life expectancy is 85 if you are a man, and it is 87 if you are a woman. It can be hard to imagine what it would be like to be in your 80s, but most seniors will indeed have this experience.
When you reach an advanced age, people close to you may simply be unable to provide the level of assistance that you need. Many octogenarians find it very hard to get around physically, and there are those that have serious medical conditions. And of course, dementia that is caused by Alzheimer’s disease or some other underlying condition is quite common among this group.
Medicare Won’t Help
You may assume that Medicare would pick up the tab if you require nursing home care toward the end of your life. After all, this is a program that is designed to meet the health care needs of seniors, and a very high percentage of them will need long-term care.
Many people would say that it’s not fair and it does not make sense, but the cold hard truth is that Medicare will not pay for living assistance. It will pay for convalescent care for a limited period of time, but it does not pay for custodial care.
Long-Term Care Costs
Genworth Financial is a company that provides financial products for seniors, and they keep a finger on the pulse of the ongoing state of long-term care costs. They provide national statistics along with median costs for individual cities.
Here in the Charlotte area where we practice law, the median annual charge for a private room in a nursing home in 2019 was $93,805. For a semi-private room, the figure was $85,775. The median charge for a one bedroom apartment in an assisted living facility was $54,990.
These are some very significant expenses to deal with late in your life, and you have to multiply the nursing home expenses by two if you are married. Plus, the costs have been rising year-by-year.
The 2019 figure for a private room in a nursing home was two percent higher than the 2018 number. For a semi private room, the increase was just over three percent, and assisted living facility costs went up by a whopping 20 percent.
Nursing Home Asset Protection
What can you do to preserve your resources for the benefit of your loved ones in light of potential long-term care costs? For most people, the answer is Medicaid.
This jointly administered federal/state government program does pay for long-term care, but it is need-based. You cannot qualify if you have more than $2000 in countable assets in your own name. There are some resources that do not count, and we will look at them in a different blog post.
Some people will divest themselves of countable assets in an effort to qualify for Medicaid to pay for long-term care. They essentially give their loved ones their inheritances in advance or place the assets in trust, but you usually have to plan ahead because of the five-year look back period.
All of the gift giving usually must be completed at least 60 months before you apply. If you violate this rule, your eligibility will probably be delayed. The exact duration of the penalty would be calculated based on the amount of the divestitures. Simply put, if you gave away enough to pay for one year of nursing home care, your eligibility would be delayed by one year.
We Are Here to Help!
If you would like to discuss nursing home asset protection or any other elder law or estate planning matter with an attorney from our firm, we are here to help. You can send us a message to request a consultation appointment, and we can be reached by phone at 704-944-3245 (Charlotte, NC and Huntersville, NC) or for individuals in Kentucky, at 606-324-5516 (Ashland, KY) or 859-372-6655 (Florence, KY).
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