Several weeks ago Jill Schlesinger, CPF, a CBS News Business Analyst, wrote an article entitled “When making long-term care decision, get a second opinion” which was published in several news outlets. You can read the whole article here.
The article mentions that 70% of people turning 65 can expect to use some form of long term care during their lives, and that the cost is significant – the national average for a semi-private nursing home room is $85,776 per year, and home health aides cost an average of $22 per hour. The article also correctly states that “Medicare and most health insurance plans, including Medicare Supplement Insurance (Medigap) policies, do not pay for more advanced services, sometimes called ‘custodial care.’”
The result is that many people have to rely upon Medicaid, a joint federal and state administered program that helps pay for certain health services for those who have limited resources. However, Medicaid has very strict rules including asset limits, a 5-year look back period, and transfer penalties if assets are gifted or transferred improperly. The article then recounts the story of Ms. Schlesinger’s friend and her friend’s mother, giving some basic facts including that the 91-year old mother owned a house, had $60,000 in the bank and the type of long term care planning that had been recommended.
While Jill Schlesinger’s article touched upon some of the basic Medicaid rules, there are many variables in Medicaid planning depending upon the state in which you live, and each client’s unique circumstances. There are many planning options depending on the situation and desires and wishes of the person seeking Medicaid.
We often see many situations involving Medicaid applicants that present unique problems. For example: What if there is an exempt homestead asset, but the homeowner won’t be able to afford to keep the house if she goes into a nursing home? What if there is a homestead property, but the homeowner put her child’s name on the deed only 6 months prior? What if the Medicaid applicant now has $60,000 in the bank because she gave her grandchild $30,000 the year before?
An experienced elder law attorney knows how to handle these scenarios in order to preserve Medicaid eligibility. Also, different states may have different Medicaid criteria, which in turn may lead to different planning options. What works in one state may not work in another–even with the exact same facts.
So, our advice is to be careful when reading national articles on complicated subjects that are difficult to condense into a few paragraphs.
Planning for long term care is something that everyone should do. It is a complicated area fraught with many “do’s and don’ts” that can mean the difference between getting care for your loved one (and going broke in the process), or getting the care for your loved one with the peace of mind that their assets have been protected as much as possible.
If you or someone you know needs sound long term care planning advice, please give us call. We’re ready to help you and your family.