Custodial care is not covered by Medicare. This is the type of care that you would receive in a nursing home or assisted living community. Medicare will only pay for convalescent care after a three day hospital stay for a period of up to 100 days.
This presents a challenge for many individuals because the majority of Americans will eventually need long-term care. A stay in a nursing home or assisted living community is extremely expensive. Most people cannot comfortably pay these expenses out-of-pocket.
When we suggest that most people will require living assistance eventually, you may question that assertion. The United States Department of Health and Human Services tells us that 70 percent of seniors will require help with their day-to-day needs.
Many people require long-term care because they are suffering from dementia. According to the Alzheimer’s Association, roughly 45 percent of people who are at least 85 suffer from Alzheimer’s disease.
Life expectancies are increasing. Once you have reached the age of 65, it is likely that you will live into your 80s. Alzheimer’s disease is certainly a threat to anyone who lives to an advanced age, and it is even a threat to younger seniors.
The Alzheimer’s Association website is a good source of information for people who are interested in this disease. Those who are planning ahead for the eventualities of aging should definitely be aware of the facts. You can reach the section of the website that is devoted to warning signs by clicking this link: The Alzheimer’s Association.
Medicaid is a government program that does pay for long-term care. If you were to recognize the onset of Alzheimer’s symptoms, you may want to consider planning ahead with Medicaid eligibility in mind. It is possible to position your assets in a way that benefits your loved ones. If you do this in advance, you can potentially gain eligibility while keeping a maximum store of resources in the family.
North Carolina Medicaid Planning
Most of the seniors in nursing homes are enrolled the Medicaid program. Many of these people were never poor throughout their lives.
How can this be? You must demonstrate financial need to qualify for Medicaid.
If you’re like most people you essentially have two choices when it comes to North Carolina Medicaid eligibility. You could spend all of your retirement savings (i.e the inheritances that you were going to leave to your children) on long-term care. Once you are essentially broke, you would be able to qualify.
The other option would be to divest yourself of assets in a way that benefits your family in advance of applying for Medicaid. This is called “spending down.”
Some people are under the impression that you could convey assets into a revocable living trust in advance of applying for Medicaid. The assumption is that the trust would own the assets so they would not be counted by the Medicaid program.
In fact, this is not the case. Revocable living trusts are very commonly utilized, and they are relatively simple to create. However, this type of trust will not help with Medicaid planning because the trust is revocable.
You can rescind the trust at will or change the terms in any way that you want to at any time. Because you retain control, the Medicaid program would count these assets as your personal property.
However, there is another type of trust that can be used with Medicaid eligibility in mind. This would be an irrevocable Medicaid trust. You would not be able to access assets that you conveyed into the trust, but you could continue to receive income from the trust before you apply for Medicaid coverage.
There is a lot to take into consideration when you look ahead toward the future. Long-term care costs are a wildcard that many people don’t consider when they are planning for retirement.
Medicaid program rules are complex, and people are understandably going to have a lot of questions. We have compiled a special report that will answer many of these questions. This report is free, and you can access your copy quickly and easily through this website. To obtain access to the download, click this link: North Carolina Medicaid Planning Report.
Attend a Free Seminar
We can provide you with a great deal of very useful information in person if you attend one of our free seminars. There are a number of dates coming up in your future, and you can visit our seminar page to get all the details.
- What You Need to Know about the Medicaid Look-Back Rule - January 3, 2023
- How to Pass Down Your Legacy in Your Estate Plan - October 3, 2022
- Practical Steps to Take after Receiving a Terminal Diagnosis - September 30, 2022