The matter of long-term care is one of the most pressing elder law issues of our day. We will look at long-term care expenses in this post, and we will also examine the limitations of the Medicare program.
Medicare
Many people are confident about their ability to handle medical expenses in the future because they will qualify for Medicare coverage. Medicare is a government health insurance program, and you pay into it when you are paying FICA taxes throughout your working career.
You get four retirement credits for every $1200 that you earn in 2014. It is possible to accumulate as many as four retirement credits in a year. This is the maximum annual accrual, regardless of how much you earn. Once you have 40 credits, you will qualify for Medicare when you reach the age of 65.
This program will be of great assistance, but it does not cover everything. There are out-of-pocket expenses to contend with for covered services, and there is one enormous hole in the coverage.
Medicare does not pay for long-term care. If you were to reside in a nursing home or assisted living facility at some point in time, you cannot count on the Medicare program to help with the bills.
These bills can be extraordinary. We practice law in the state of Connecticut, and the average annual cost for a room in a nursing home in our state is well in excess of $100,000. Since many people spend multiple years in nursing homes late in their lives, you could be faced with an enormous expense.
The United States Department of Health and Human Services tells us that 70 percent of seniors will someday need long-term care, so you are defying the odds if you assume that you will never need living assistance.
What’s the Solution?
How do people manage long-term care expenses if Medicare won’t pick up the tab? For many, the answer is Medicaid. This jointly run federal/state government health insurance program will pay for long-term care.
However, it is a need-based program. To qualify, you must be able to prove that you have a significant level of financial need.
Many people give assets to their loved ones so that they can qualify for Medicaid to pay for long-term care. This is more complicated than it sounds, because there is a five-year look-back. If you give gifts to your loved ones, you must complete the gift giving at least five years before you apply, or your eligibility will be delayed.
Medicaid Planning Report
Most people who are in nursing homes are enrolled in the Medicaid program, so it is widely utilized by those who require long-term care. To learn more about this program, download our special report.
The report is free, and you can access your copy through this page: Hartford CT Medicaid Planning.
To learn more, please download our free Elder Law Attorney in Connecticut here.
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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