The Mount Clemens nursing home attorneys at our firm are being kept quite busy at the present time, and this dynamic will persist into the foreseeable future. This is because of the fact that there is an unprecedented aging of the population taking place during our current era. During the post-World War II years between 1946 to 1964, there were a great number of babies born, and this phenomenon has been dubbed the “baby boom.”
If you do the math, you can see that these people are attaining senior citizen status right around now. To put it into perspective, the Social Security Administration has stated that they are accepting about 10,000 applications for benefits every day, and they don’t expect this volume to decrease anytime soon. Since so many people are addressing the eventualities of aging, elder law attorneys are in high demand.
When you work and pay FICA or self-employment taxes, you earn retirement credits that are used to determine eligibility for Social Security and Medicare. If you have worked for at least 10 years, or if your spouse has worked for a decade or more, you will have sufficient credits to qualify for Medicare. At the time of this writing, the age of eligibility for Medicare coverage is 65.
The Medicare program provides a strong health insurance underpinning, but it does not cover everything in full. There are co-payments, deductibles, and premiums, so you should certainly be aware of these expenses and budget for them when you are developing your retirement plan. These out-of-pocket costs are usually relatively manageable, but there is one enormous gap in the coverage.
If you require nursing home care, you will not be able to rely on Medicare to assist with the costs. The program will pay for convalescent care, but it does not pick up the tab for the custodial care that you would receive in a nursing home. From a financial perspective, this is a very big deal, because the average annual cost for a private room in a nursing home in our area is right around $100,000. It is not entirely uncommon for people to spend multiple years receiving care, so the bills could consume the legacy that you have always intended to pass along to the people that you love.
This situation is why the expertise that our Mount Clemens nursing home attorneys bring to the table is so valuable. Medicaid is a jointly administered federal/state government health insurance program that will pay for nursing home care if you can obtain eligibility. Since it is intended for financially needy individuals, there is a low asset limit of just $2000.
There are things that you may own that are not considered to be countable assets. Your home is not counted, but there is an equity limit that is adjusted annually to account for inflation. In 2018, this equity limit is $572,000. If you are entering a long-term care facility, and your spouse is remaining in the family home, there is no equity limit at all.
One vehicle that is used as a primary source of transportation is exempt, and you can maintain possession of wedding rings, engagement rings, and heirloom jewelry. Your household items would not be counted, and your personal effects would not be part of the equation.
When you hear about the Medicaid asset limit, a logical notion may pop into your head. You can simply give assets to loved ones that would be inheriting them someday anyway if you ever find out that you need nursing home care. This makes sense on the surface, but this would not be in the spirit of the program, so there is a 60 month look back period in place. You have to complete any gift giving within five months of the submission of your application for Medicaid coverage.
If you fail to do this, you are penalized, and your eligibility is delayed. The length of the penalty would depend on the amount of money that you gave away. To provide an example, let’s say that the government has determined that the average cost for a year in a nursing home is $100,000. You gave away $200,000 eighteen months before you applied for Medicaid. Under these circumstances, your eligibility would be delayed by two years, because you gave away enough to pay for two years of nursing home care.
Schedule a Consultation Today!
Because of this five-year look back, careful advance planning is necessary to divest yourself of assets at the right time. This is where our Mount Clemens nursing home attorneys can enter the picture to help you develop a plan. If you would like to schedule a nursing home asset protection consultation, give us a call at 586-493-7661.