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Actually, according to the United States Department of Health and Human Services, 35 percent of seniors will reside in nursing facilities. When you include in-home care and assisted living communities, 52 percent will receive professional long-term care.
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The answer to this question may surprise you in a not so good way: Medicare does not cover any portion of long-term custodial care bills.
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In the Hartford area where we practice, the median annual charge is about $180,000 at the time of this writing.
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The overall average is one year, but just over half the people that receive long-term care incur the expenses for more than a year.
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Yes, but there are some good reasons to take pause. For one, if you get the coverage late in your life, it is quite expensive. In addition, the rates can and do go up along the way. Thirdly, there is a so-called elimination period. You may pay the premiums for a decade or more without getting anything in return. If you file a claim, you have to pay out-of-pocket for a certain period of time before the benefits will kick in. The elimination period is 30, 60, or 90 days depending on the policy terms.
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Fortunately, there is a widely embraced solution. Medicaid will cover long-term custodial care, and it is paying for most of the nursing home care that is being received by seniors. Medicaid is a need-based program, and I have resources. How could I possibly qualify? You can potentially transfer assets out of your name. However, many people rely on income that is generated by their savings. If you were to give your children their inheritances in advance, you may not be able to make ends meet if you are in this category. There is another detail that makes the matter more complex. There is a five-year Medicaid look back period. If you divest yourself of assets today without getting fair value in return, you are ineligible for Medicaid for a period of 60 months.
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The healthy spouse is referred to as the “community spouse” in Medicaid parlance. They can receive a Community Spouse Resource Allowance, which is half of the assets that are counted up to a limit. When this is being written, the limit is $148,620 in 2023. Income that is brought in by the spouse that will be in a long-term care facility must be contributed toward the cost of the care. However, if a healthy spouse needs the income, they can continue to accept it in the form of a Monthly Maintenance Needs Allowance.
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Obviously, advance planning is key, and you can protect your income if you convey resources into an irrevocable trust. You would no longer have access to the principal, but you could accept distributions of the trust’s earnings until and unless you apply for Medicaid.
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Schedule a Nursing Home Asset Protection Consultation
As you can see, your legacy can be severely damaged if you do nothing to prepare for long-term care costs. On the other hand, if you take the right steps in advance, you can maintain your lifestyle and proceed with peace of mind.
If you are ready to get started, you can schedule a consultation at our Glastonbury or Westport, CT elder law office if you call us at 860-548-1000. There is also a contact form on this site you can use if you would rather send us a message.
