Do you have a loved one who is no longer able to care for themselves? Are you shocked at the cost of skilled care? Are you confused about options like assisted living vs. nursing homes? Are there options to help your family member stay at home? Does your loved one need financial assistance to get the care they need? Is there help for seniors who need financial assistance? What are the criteria to qualify? Skilled nursing facility care cost is a common topic of conversation these days. You want to provide the very best care for your elderly family members but how to do this is often confusing and worrying. What level of care do they need? How will they pay for it?
Most elderly people understandably want to live at home and be independent for as long as they possibly can. But there may come a time when they need more help than family members can provide. Assisted living facilities offer help with some aspects of daily care but not the same level of care as a skilled nursing facility. If your loved one is no longer able to accomplish activities of daily living such as walking, bathing, eating, or managing their medications, they need skilled nursing care. Unfortunately, skilled care is expensive.
Sadly, far too many potential clients wait until a crisis has happened or, even worse, until they or their loved one are nearly out of assets before they come to us to talk about ways we can help. We have run into many cases where a spouse still at home has completely impoverished themselves taking care of their sick spouse due to bad advice from well-meaning people. Unfortunately, in several of these cases most if not all of their assets could have been preserved in case they needed them later with just a little bit of prior planning.
As lawyers with a focus in the area of elder law, we have been helping our clients navigate these decisions for over a decade. We find there are really only 5 ways to cover the cost of long-term care:
1. Spend your money until you are broke
Unfortunately, this is the default option and the one many potential clients start with. While there are a number of ways to preserve assets if proper planning is done to begin with, by the time some clients get to us they have spent most of their assets and there really isn't much planning we can do. At that point we begin talking about Medicaid and how to preserve the little the clients have left. Don't let this happen to you! The best time to begin planning is about 5 years before someone needs care. The second best time is right now. The longer you put off coming up with a plan, the more care you will have to pay for from your own pocket.
2. Get long-term care insurance
We are big fans of long-term care insurance when our clients qualify and can afford it. This can be a great way to give youself options and often allows clients to stay home for years longer than they would have been able to otherwise. While we do not sell insurance products, we highly recommend our clients talk to someone who does to see if they qualify and, if so, whether they feel comfortable with the cost of the coverage. Nowadays, most of these products are actually life insurance policies which allow the client to draw some multiple of the death benefit early if they need care. If, however, the client never needs long-term care, their beneficiaries instead get the life insurance proceeds after the client passes.
Often, our clients tell us that they have Medicare and are planning to use that to cover long-term care costs. That is a mistake. Medicare only covers a short-term stay, typically for rehabilitation. To qualify for this, the patient must be admitted to a skilled facility within 30 days of leaving the hospital. At that point, Medicare pays fully for the first 20 days and the patient's copay is $200 (in 2023) for the next up to 80 days. However, our experience is that usually around day 30-40, the facility will decide that further rehabilitation is unlikely to be helpful, at which point the patient must pay the full rate to stay at the facility with no further payments from Medicare.
Again, this is good to help with a temporary stay after a serious issue such as a fall or a stroke, bur Medicare does not really cover long-term care expenses.
We get quite a few questions about Medicaid. Keep in mind that while there are dozens of Medicaid programs, the one we are talking about here is Medicaid for Nursing Home care. There are asset and income limitations to this program and it is designed for people who are unable to otherwise pay for nursing home care. Medicaid has an asset limit for the person going into the facility of $2,000 in countable assets. If that person has a spouse who is not on Medicaid, the spouse may keep $66,480.
Please keep in mind that these are just some good numbers to start a discussion. Planning to qualify for Medicaid benefits for nursing homes is a very complex area of the law and well beyond the scope of this post. If you or someone you know is considering planning for these benefits or trying to preserve assets while qualifying for these benefits, please give us a call so we can discuss this in more detail.
5. Veteran's Benefits
Finally, for qualifying veterans there is a program called Aid and Attendance. Essentially, this program is in place to allow a qualifying veteran (or their spouse, in some cases) to receive extra monthly income to offset recurring monthly long-term care expenses such as in-home help, assisted living, or nursing home care costs. Currently, the net worth limit is $150,538, though this number does not count the primary residence or some other specifically exempt assets. Again, if you have questions about whether you qualify or how to plan for one day receiving these benefits, please give us a call.
At Stratton and Reynolds, we stay current on complex federal and state regulations, as well as documentation requirements. We can help you and your family with the complexities of Medicaid applications and paperwork. It is never too early to start planning. Come and talk to us before you begin the process of seeking skilled nursing facility placement for your loved one. Call us at 803-358-7214 or complete the contact form.
**All numbers in this article are as of April 2023.