The following article by the Senior Directory is aimed at helping you learn options regarding the various payment options for Long-Term Care in a Nursing Home. It is not a Do-It-Yourself guide. Before doing anything drastic with your assets, consult a Florida Elder Law Attorney who can work out the particulars for your individual situation and make sure everything is filed correctly.
How much does Long Term Care at a Nursing Home cost?
National averages price long-term care facilities at about $250 a day. That comes out to $90,000 a year, which is just for basic care. Start adding in amenities, like Memory Care for Alzheimer’s patients, and that number quickly starts to rise. In North Florida the average cost can quickly increase from around $9,700 a month to $20,000 or even $30,000 a month.
What is the Point of Protecting Assets?
As previous members of the American workforce, we tirelessly worked for decades in order save money for retirement, secure our future through wise investments, purchase things we want and value, and we have been planning to ultimately leave these assets to our children when we pass away. Unfortunately, most of us are not expecting to have our property confiscated, and our savings decimated during our golden year. The sad reality is often that is exactly what happens to many people caught off guard when confronted with the necessity of Long-Term Care. Debt can be passed down to children (instead of inheritance), and spouses at home can be left in situations where they can no longer look after themselves, once their husbands or wives enter the Long-Term Care system.
Here are the 3 main ways of paying for Long-Term Care, which DOES NOT protect your assets:
- The obvious answer is out of pocket. However, this approach quickly becomes untenable.
- Private Insurance. Unfortunately, most insurance policies do not cover Long Term Care. Coverage for Long-Term Care is available, but it is an extra benefit that most people do not have. These insurance add-ons are only available to healthy adults, which is usually years before they start thinking about retirement.
- Medicare. Most seniors have Medicare, but it usually only pays for Short-Term stays, not Nursing Homes.
What is the Best Method of Paying for Long Term Care, without Sacrificing Assets?
Medicaid is the best method of paying for a nursing home while also protecting your assets. However, since Medicaid is such a desired insurance policy, the qualifications are extraordinary. The main qualifier is the individual, or household applying may only have financial holdings of a few thousand dollars. Most people do not qualify, outright… however, there are alternative options. An Elder Law Attorney can help assess your finances, and then help you decide your best course of action. If you and your attorney decide to go the Medicaid-route, there are a few methods they may advise you to do to help protect your assets, while making you eligible for benefits at the same time.
- Inform you of acceptable and unacceptable assets. Medicaid does not take all assets into consideration when making an appraisal. Conditionally, you may be able to retain your home, car, personal items/furniture, and life insurance. You may even be able to buy some of these things now (converting unacceptable assets into acceptable ones).
- Use your current assets to eliminate debt.
- Use asset protection trusts early. When done lawfully, these trusts permit you to protect both principal and income, while still allowing you to qualify for Medicaid.
- Advise proper gifting etiquette, through the creation of estates, trusts, and other entities. Improper gifting is done within five years of applying to Medicaid usually disqualifies applicants. It is also possible to bequeath some assets now while continuing to use them and get benefits.
Written by the Senior Directory