For answers to your questions on caring for your parents or Medicaid, listen to Jim Ruggiero discuss Life Care Planning on WDIY 88.1 FM, Your Financial Choices radio show.
The high cost of long-term care has made planning in this area an important issue for most middle class seniors and their families. In fact, most seniors will likely require some form of long-term care, many of whom are unprepared for the significant financial burdens it places on their hard earned savings. Financial devastation looms large for a family facing ongoing care at a rate of $6,000 or more per month.
Long-Term Care Options
While some seniors are able to afford private pay, they should keep in mind that in all but the richest families, the cost of long-term care will wipe out their savings 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. Of course, many of us can’t afford the significant premiums which can be up to $5,000 or more per person per year. 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 facility. Indeed, its not unusual for persons who have long-term care insurance to still have to use Medicaid to pay for their care.
The other option to pay for care is the Medicaid program. Medicaid is a joint federal-state program that provides medical assistance to various 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.
While Medicaid eligibility with respect to long-term care was not difficult in the past, there has been a steady swing of the pendulum toward more and restrictive 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 simply reviewing one’s bank statements. There is a myriad of regulations involving look-back periods, income caps, transfer penalties and waiting periods to plan around. Even with respect to your asset holdings, there are certain rules affecting different types of assets which are countable for purposes of determining eligibility.
Our law firm has the experience and the expertise to help avoid the financial ruin associated with the high cost of long-term care. Contact us today to start the process of understanding the issues surrounding Medicaid eligibility and to implement the planning and application process.