Perhaps the most profound story in the elder law community at the present time is the high and rising cost of long-term care. As of the end of 2010 the national average cost for a year in a private room in a nursing home was close to $85,000, and the annual fee for residence in an assisted living community was in the neighborhood of $40,000.
There are those who hear about these costs and let the information go in one ear and out the other because they’re under the impression that Medicare will cover all their health care needs once they reach the age of 65. The truth is that Medicare does not cover long-term care costs, so it is something that you need to plan for on your own.
Though Medicare does not cover these expenses Medicaid will pay for long-term care if you qualify, but to do so you must have limited financial resources. For this reason many people engage in the practice of “spending down” in an effort to reduce their assets to qualify for Medicaid.
There is however a five-year Medicaid “look back” period. Any gifts that you have given within five years of applying for Medicaid will result in a penalty that precludes you from receiving benefits for a period of time that is calculated based on the value of the gift or gifts and the average cost of long-term care in your state of residence.
So, in the final analysis Medicaid is an option for those who would find it difficult to impossible to pay for long-term care costs out-of-pocket. However, it is important to plan well in advance and the best way to devise a cogent strategy would be to consult with an experienced elder law attorney who has a thorough understanding of the Medicaid system.
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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