The majority of senior citizens will need help with their activities of daily living eventually, so this is a subject of great interest to elder law attorneys. You may assume that Medicare would pay for in-home care or a stay in a nursing facility, but this is simply not the case.
Genworth Financial conducts research on an ongoing basis to keep a finger on the pulse of long-term care costs around the country. In addition to the national and statewide figures, they also drill down to look at individual metropolitan areas.
They have been able to go through all the data for 2020, and they have recently released their findings.
Rochester Long-Term Care Costs
Our office is in Pittsford, New York, so will share the numbers for the Rochester metropolitan area. The median annual charge for a private room in 2020 was $161,695, which is a 1.37 percent increase over the 2019 figure. This is roughly equivalent to the overall rate of inflation.
For a year in a semi-private room, the median cost was $148,555, which is actually a very slight decrease of less than one percent. The median annual charge for a one-bedroom unit in an assisted living community went up by 9.1 percent to $62,157.
You may think that in-home care would be less expensive, but this is not the case. According to the survey, the median cost for an in-home health aide in 2020 was $62,920.
According to the United States Department of Health and Human Services, 48 percent of people that require living assistance receive the care for less than one year.
They found that 19 percent of care recipients are in the one-to-two year range, and 21 percent get the care for somewhere between two and five years. A not insignificant 13 percent require paid care for more than five years.
It should be noted that these percentages do not add up to exactly 100 because of the way that the statistics were rounded.
Nursing Home Asset Protection
These are some attention-getting figures to say the least, and this is why nursing home asset protection is an important piece to the legacy planning puzzle. Medicaid is the widely embraced solution, because it does pay for long-term care.
Since it is a need-based program, you cannot qualify if you have significant assets in your name. To develop a financial profile that will lead to eligibility, you can establish a Medicaid trust. With a Medicaid trust, you can retain full control over your assets, and even retain the economic enjoyment of the assets, but the assets will not be counted as yours for purposes of Medicaid eligibility.
The rules for creating such a trust to acquire Medicaid eligibility are complex and change frequently. Accordingly, you should only create such a trust with the assistance of a qualified elder law attorney.
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