If you work and pay FICA or self-employment taxes, you are earning retirement credits. If you make even a minimal amount of money in a given year, you will get the maximum four credits. Once you have a total of 40 credits accumulated, you will qualify for Social Security when you reach the age of eligibility, and you will be eligible for Medicare coverage when you celebrate your 65th birthday. If you are married, and your spouse has accumulated these credits, even if you have not, you would be eligible as well.
When you are planning ahead for retirement, you should understand the fact that there are out-of-pocket expenses that you have to cover yourself when you have Medicare coverage. There is a monthly premium for Medicare Part B, which is the portion of the program that pays for outpatient care and visits to doctors. There is a deductible for Part A, which is the hospitalization component, and there can be copayments for exceptionally long hospital stays.
Part C allows you to use your benefit to obtain private insurance, and the prescription drug portion is Medicare Part D. For prescription coverage, there are deductibles, co-payments, and premiums. Without question, for some people, all of this can add up considerably. You should certainly budget for these potential expenses, and we can help you understand all of the possibilities if you consult with us to develop a plan for aging.
The out-of-pocket expenses are usually manageable for most people that planned ahead for retirement appropriately. However, there is one enormous gap that is not easily filled by writing a relatively small check. Medicare will pay for convalescent care if you are going to recover after surgery, or after you have gone through some type of illness. However, if you ultimately reside in a nursing home, you are on your own, because the program will not pay for custodial care.
Here in Michigan, the median annual cost for a private room in a nursing home in 2017 was $103,295. This can add up if you require multiple years of care toward the end of your life. The expenses could potentially consume everything that you intended to leave to your loved ones as their inheritances.
All of this may sound like gloom and doom, but there is some light at the end of the tunnel if you work with our firm to prepare for these expenses. Medicaid is a jointly administered federal/state government health insurance program, and it does pay for nursing home care if you can gain eligibility. This takes careful planning for most people, because there is a limit on countable assets that is just $2000, and there are income limits as well.
It would be logical to decide that you can simply give your loved ones their inheritances in advance you find out that you are going to require nursing home care. Unfortunately, this is not possible, because there is a five-year look back period. You are penalized, and your eligibility is delayed if you give gifts or convey assets into an irrevocable trust within 60 months of the submission of your application for Medicaid coverage.
The duration of the penalty would be determined based on the amount of the divestitures and the average cost of nursing home care as it has been determined by the government. To provide an example, if you gave gifts totally $200,000, and the average cost for a year a nursing home was $100,000, you gave away enough money to pay for two years of nursing home care. As a result, your eligibility would be delayed by two years.
Because of this five-year look back period, careful, informed planning is necessary to take the right steps at the right times so that you can gain eligibility when you need it without losing anything in the process.
Meet Our Mount Clemens Nursing Home Lawyers!
We are holding a series of informative seminars over the coming months, and we strongly urge you to attend the session that fits into your schedule, because you can obtain a great deal of valuable information. Best of all, you get to interact directly with our Mount Clemens nursing home lawyers without reaching into your pocket for a single cent. That’s right, these seminars are being offered free of charge, but we do ask that you register in advance so we can reserve your seat. Simply visit our seminar page and follow the simple instructions to secure your slot.