As elder law attorneys, we pay close attention to financial and legal matters that are specifically relevant to senior citizens. Long-term care costs are at the top of the list, because most seniors will eventually need help with their activities of daily living.
Genworth Financial has been conducting surveys on an annual basis that provide detailed information about the state of elder care costs around the country. They have recently released their survey for 2021, and the results are not encouraging.
Significant Increase
When we say that most seniors will need living assistance, we are talking about 70 percent, and 52 percent require paid care. Just over one third of individuals that are 65 years of age and older will reside in nursing homes late in their lives.
In Connecticut, the median cost for 12 months in a private room in a nursing home was $179,398. This is a 6.85 percent increase over the 2020 figure. The annual median charge for a semi-private room was $158,958, and this is an increase of just under two percent.
Living at home while you are receiving assistance from a professional in-home health aide is an option for some people. This can be preferable to a move into a nursing home because of the comfort and familiarity that your home will invariably provide.
The annual cost for an in-home health aide went up by 17 percent to $66,924. If this trajectory remains constant and you need paid long-term care in 20 years, the impact on your legacy can be considerable.
Medicare to the Rescue?
A lot of people assume that Medicare will pay for in-home care or a stay in a nursing home. After all, the purpose of the program is to address the health care needs of senior citizens, and most elders will need living assistance.
Many people find it hard to see the logic, but in fact, Medicare does not cover custodial care. This is an inconvenient truth, but it is a fact of life. Fortunately, elder law attorneys have developed strategies that can be used to address this harsh reality.
Medicaid Eligibility
Nursing home asset protection will typically involve Medicaid eligibility. This program will cover long-term care, but there is a hurdle to cross.
In the state of Connecticut, the Medicaid asset limit is $1600, but this is for countable assets. Some types of property are not counted, and a healthy spouse is allowed to keep a certain amount of property if their spouse applies for Medicaid.
The most significant non-countable asset is a home, but you have to be aware of the Medicaid estate recovery mandate. If you are the owner of a home at the time of your death, the program can put a lien on the property.
Other non-countable assets include your wedding and engagement rings and heirloom jewelry. Household items and personal belongings that cannot be sold for a great deal of money are exempt, and you can gain eligibility if you own a motor vehicle.
Five-Year Look Back Period
You can transfer assets out of your name in an effort to qualify for Medicaid, but there is a five-year look back period. If you give away assets within five years the date of your application, your eligibility would be delayed.
Let’s say that you gave an amount of money to your children that would have paid for two years of nursing home care. Under those circumstances, your eligibility would be delayed by two years.
Advance planning is key, and a Medicaid trust can be the ideal solution. You can still receive income that is earned by assets that are held by the trust, and this can allow you to maintain your lifestyle while you are living independently.
Your home can be conveyed into the trust as well to protect it from Medicaid estate recovery. If you apply for Medicaid at least five years after you fund the trust, the assets in the trust would not count.
Schedule a Consultation Today!
If you are ready to work with a Hartford, CT estate planning lawyer to put a plan in place, we are here to help. You can send us a message to request a consultation appointment, and we can be reached by phone at 860-548-1000.
Mr. Nirenstein is licensed to practice before the courts of the State of Connecticut and the United States District Court. He is a member of the Connecticut and Hartford County Bar Associations, and the Estate and Probate, Elder Law, Business Law and Real Estate Sections of the Connecticut Bar Association.
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