The elder law attorneys here at Nirenstein, Horowitz & Associates counsel clients that are preparing for the eventualities of aging. Unfortunately, some of the realities are not very appealing, but it is important to address them head on as you develop a pragmatic plan for the future. One of these challenging situations is the potential need for nursing home care toward the end of your life.
There are a number of different reasons why people ultimately require the type of care that only a nursing home can provide, but the major culprit is Alzheimer’s disease. If you were to visit the Alzheimer’s Association website, you would find a treasure trove of very useful information. According to research that they cite, somewhere in the vicinity of 40 percent of Americans that are 85 years of age and older have contracted this disease.
In the geriatric community, elders that are 85 and older are referred to as the “oldest old.” Many people are surprised to hear that this group is growing faster than any other demographic subset. If you are fortunate enough to celebrate your 70th birthday, it is statistically likely that you will live long enough to join the ranks of the oldest old.
When you combine all this information, you can plainly see that Alzheimer’s is a looming threat for the vast majority of senior citizens. Clearly, many people with this disease will require nursing home care, and as we have stated, there are nursing home residents that have other ailments.
Cost Concerns
If you pay into the program sufficiently throughout your working life, you will qualify for Medicare when you reach the age of 65 under currently existing guidelines. As we all know, this is a health insurance program that is designed to address the health care needs of senior citizens.
The United States Department of Health and Human Services tells us that 70 percent of seniors will require help with their activities of daily living at some point in time, and a lot of these people will ultimately reside in nursing homes. Given these facts, you may logically assume that government health insurance for older Americans would cover long term care.
In fact, this is not the case. Medicare will pay for convalescent care, but it does not cover custodial care, which is the type of assistance that you would receive in a nursing home. This presents a financial problem, because nursing homes are very expensive.
Genworth Financial conducts ongoing research into the state of long term care costs. Our elder law offices are located in Connecticut. According to their study, in 2017, the median charge for a private room in a nursing home in our state was well in excess of $160,000 per year. It is not entirely uncommon for people to spend multiple years receive nursing home care, so the accumulated expenses can be staggering.
Asset Protection
All of the above sounds like some pretty bad news, but fortunately, there is a solution that we can help you implement. Medicaid is another government health insurance program that will pay for long term care. It is intended for people with very sparse financial resources, so there is a $2000 limit on assets that are considered to be countable.
There are some things that you own do that not count, including your home, though there is an equity limit that is $858,000 at the time of this writing. We should point out the fact that Medicaid can seek reimbursement through the sale of your home during the probate process after you pass away, but you can take steps to prevent this with the proper planning.
To stay within the asset limit, you can position assets out of your own name. Since the nursing home will probably be your last place of residence, you could simply give assets to loved ones who would be inheriting them anyway. However, there is a five-your look-back period in place to prevent you from giving assets to loved ones shortly after you find out that you need nursing home care. You are penalized, and your eligibility is delayed if you give away resources within 60 months of the submission of your application.
Contact Our Firm!
Careful advance planning is the key to obtaining Medicaid eligibility at the ideal time without losing anything in the process. If you would like to discuss the details with one of our elder law attorneys, give us a call at 860-548-1000 to set up a consultation.
( By appointment only )