As Mount Clemens elder law attorneys, we advise clients that are concerned about the serious matters that they will face as senior citizens. Without question, the most pressing elder law issue of our day is the matter of long-term care and the expenses that go along with it. If you are thinking that it is unlikely that you will ever need living assistance, you should understand the facts.
There is a website called longtermcare.gov that is part of the Internet presence of the Event States Department of Health and Human Services. If you were to visit the site take a look around, you would gain a great deal of useful knowledge. One statistic on the site that really stands out is the fact that seven out of every 10 people that are turning 65 on any given day will need long-term care eventually.
It is true that some people can receive assistance that they need in their homes from their loved ones, at least for a while. However, at some point in time, nursing home care may well be necessary. Everyone has heard of Alzheimer’s disease, but a lot of your surprised when they hear about its widespread nature.
This scourge on our nation’s elderly strikes 40 percent of individuals that are 85 years of age and older. This threat alone is enough to get your attention, but there are other underlying reasons why people ultimately reside in nursing homes toward the end of their lives.
When you digest this information, and you realize it is possible that you may spend some time in a nursing home, you may not be concerned because you will be enrolled in the Medicare program at that time. The age of Medicaid eligibility is 65, so if you have paid into the program sufficiently, you will have this source of health insurance when you are a senior citizen.
Since Medicare was created to provide a health care safety net for senior citizens, it would be logical to assume that will pay for nursing home care since many seniors will need it. Many would say that it does not make sense, but in reality, Medicare does not pay for nursing home care.
Nursing Home Costs
A lack of coverage is a very big deal, because nursing homes are extremely expensive. Genworth Financial is a company that sells financial products for elders, including long-term care insurance. Because this is their field, they do a lot of research to keep track of the state of long-term care costs around the country.
There just updated their figures for 2018, and the numbers are not very encouraging. As Mount Clemens elder law attorneys, we are located in the greater Detroit area. According to their study, the median annual charge for a semi private room in our part of the country is $10,798 per month.
If you do the math, this comes out just under $130,000 per year. Unfortunately, you won’t save much if you sacrifice some privacy for somewhat lower bill. The median charge for a semi-private room is $9095 a month or $109,140 a year.
What do you do to protect your assets from devastating nursing home costs? For many, the solution is Medicaid. This jointly administered federal/state government health insurance program will pay for a stay in a nursing home if you can gain eligibility. However, this requires careful planning, because you cannot gain eligibility if you have over $2000 in countable assets.
We should point out the fact that some things that you own do not count, including your home, but there is an equity limit of $572,000. Your household goods are not counted, and you can maintain possession of your personal belongings and one motor vehicle. Any amount of term life insurance is allowed, and you can have as much is $1500 of whole life insurance coverage.
When it comes to the assets that are counted, you could implement a Medicaid spend down strategy by giving gifts to your loved ones. In a real sense, this would be an exercise in distributing inheritances in advance. However, you have to complete any gift giving at least five years before you apply for Medicaid to avoid penalties, so timing is key.
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