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Medicaid
Planning
Nursing Home and
Long-Term Healthcare
Many people are not
aware that Medicare and private Medicare supplement insurance do
not cover the cost of long term care. For the average individual
or married couple who have worked hard all their married life,
nursing home costs and costs of long-term care can wipe out
their entire life savings in months.
Under very limited circumstances Medicare
will cover 100% of the first 20 days and part of the next 80
days (supplement insurance may make up the difference). After
100 days, Medicare won't pay anything and usually neither will a
private supplement policy. In reality, Medicare HMOs will cover
no more than a few weeks.
Of people reaching 65, over 40% will spend
time in a nursing home. The average cost is $6000 per month and
steadily rising.
For those facing a potential long term care
crisis, there are three options.
1. Pay the costs out of private funds.
2. Purchase long term health care insurance
or
3. Apply for and qualify for public benefits
including Veterans and Medicaid benefits
Option number 1 is no problem if you are a
millionaire! Option number 2 is becoming increasingly more
popular. We strongly recommend that all who are eligible
to purchase some long term care insurance. Firstly, Medicaid
will pay for nursing home only minimal in home care and assisted
living. Secondly, qualifying for Medicaid can be complicated and
stressful.
If you purchase long-term health care
insurance, make sure you use a reputable company and buy at
least 5 years of in-home, assisted living and nursing home
coverage at a minimum of $150 per day with a cost of living
rider. Please contact our office for a complete checklist of
criteria for purchasing long term insurance.
Veteran’s Benefits (Option number 3), under
certain circumstances (usually for an assisted living resident
or with a full time aide,) a wartime veteran or his widow may be
eligible for certain veteran’s benefits. We use this little
known benefits successfully for many clients. A veteran can
receive up to approximately $1700 per month; a widow
approximately $1000 per month
Medicaid can cover the complete cost of a
nursing home. There are certain assets that are exempt from
consideration and can be kept when applying for Medicaid. These
include:
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Your personal residence
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One automobile
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Whole life insurance with cash surrender
value of less than $2,500
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Prepaid funeral plan
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Household furnishings
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$2,000 for a single person and
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$99,540 for a married person
Other assets such as cash, bonds, savings,
stocks, etc. may need to be used up before becoming eligible.
Please note that the
Congress has passed sweeping legislation that
significantly effects Medicaid Nursing Home benefits.
The new law imposes
punitive new restrictions on the ability of the elderly to
transfer their assets before qualifying for Medicaid coverage in
a nursing home. These changes can have far reaching
implications regarding your ability to access quality and
affordable long term care.
Some of the more
draconian provisions are:
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The look back period
is extended from 3 to 5 years.
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The value of a house
that can be exempt is $500,000.
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Annuities and many
other planning tools will be eliminated.
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Monthly gifts are
severely curtailed.
I strongly encourage
you to readjust your long-term care path based on
this potential new legislation. Preplanning is now
increasingly more important in order to maximize the
possibility of saving all of the family's assets. Once illness
strikes the options become fewer. If you have any questions
about this very important area of the law, please contact us.
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Florida
Elder Law, Estate Planning &
