What many of our clients do not realize is that long-term health care is expensive, and will only get more expensive with time. Many people are shocked when they learn about the actual costs of long-term health and feel helpless because they cannot afford it. The good news is that long-term health care can be affordable with careful estate planning.
So just how expensive is long-term health care? Lets look at the average costs both in the United States and in Florida. The median cost of a private nursing home in the United States as a whole increased by 1.24 percent from 2015 to $92,378 a year according to studies performed by genworth.com
The median cost of living has also grown in Florida. The cost of private nursing home care has also risen significantly in the past few years. The median cost of a semi-private room is $89,060, while the median cost of a private room is $100,375. Nationwide, Genworth reports that the median cost of a semi-private room in a nursing home is $82,125, which is up 2.27 percent from 2015.
In comparison, the median cost of an assisted living facility is also on the rise. In 2016, the median cost of a Florida assisted living facility is $36,540. Further, the median cost by month of a Florida assisted living facility is $3,628. The national median rate for the services of a home health aide was $20 an hour, the same rate as 2015. The cost of adult day care, which provides support services in a protective setting during the day, actually fell from $69 to $68 a day.
How Estate Planning Can Help
A Genworth survey found that Americans underestimate the cost of in-home long-term care by almost 50 percent. Almost a third of Americans believe that long term care will cost less than $417 a month. In reality, an in-home aid working 44 hours a month would cost a patient $3,861 a month on average.
Most people do not have a sufficient amount of personal assets to cover these costs on a long-term basis. This is why we recommend our clients plan for Medicaid assistance through an iPug trust.
An iPug Trust, or Florida Asset Protection Trust can offer many benefits to our clients. One of the best benefits is that it allows a client to qualify for Medicaid coverage in Florida. Florida is different from other states in that it requires residents to meet certain qualifications before they can receive this long-term health care assistance.
Florida has a means test and an asset test, which means that if a resident has a gross income over a certain amount than he or she will not qualify for Medicaid help. This is also true if a person has over a certain amount of assets.
Medicaid is a wonderful government program that allows state residents to afford the expensive long-term health care. The iPug trust works by transferring a person’s assets and gross income into a trust. For purposes of Medicaid coverage, a person does not own the assets and income held by the iPug trust.
The iPug trust will hold these assets for the benefit of the client. The trust can provide additional support and coverage to the client while Medicaid significantly lowers the overall cost of health care. The trust can also repay Medicaid any amounts required by law.
Long-term health care can be next to impossible to afford without Medicaid assistance. Unless a person is already qualified for Medicaid, he or she will need an iPug trust to qualify for the program.
For more information on how to afford long-term nursing care and health care coverage contact the Jacksonville estate planning attorneys at The Law Office of David M. Goldman.