We have all heard of Alzheimer’s disease, but there are some facts about it that will probably surprise you. In the field of elder law, the most pressing matters are impacted by Alzheimer’s, so you should understand the facts when you are looking ahead toward the future.
Many people assume that Alzheimer’s disease strikes a relatively small percentage of the elder population, but the statistics tell a different tale. According to the Alzheimer’s Association, about 6 million people in the United States have Alzheimer’s disease at the present time.
Once you become old enough to receive your full Social Security benefit, your life expectancy is 85 years if you are a man, and the life expectancy for a 67-year-old woman is 87 years. Over 30 percent of elders that are 85 years of age and older have contracted Alzheimer’s disease.
There are more than 11 million people providing unpaid care for loved ones that have Alzheimer’s disease, so most families do all they can. However, at some point, nursing home care can be the only option.
Medicare Won’t Help
Full-time residence in a nursing home with memory care capabilities is the best choice for many folks with Alzheimer’s, but the price tag is considerable. The median annual charge for a private room in a nursing home in the Rochester area last year was just under $162,000.
Medicare exists to address the healthcare needs of senior citizens, so it would be logical to assume that the program will cover a stay in a nursing home. In fact, Medicare does not cover the custodial care that these facilities provide.
The solution for most people in nursing homes is Medicaid. This jointly administered federal/state government health insurance program will cover long-term custodial care for Alzheimer’s patients and others.
Since it is a need-based program, in New York you cannot qualify if you have more than $15,900 in assets, but some resources do not count. Your home is not a countable asset in some circumstances, but this is not automatic.
Even though you can qualify for Medicaid if you are in direct personal possession of a home, there is another consideration. There is a Medicaid estate recovery mandate, so the program is required to seek reimbursement from the estates of deceased beneficiaries.
If you own a home at the time of your death, Medicaid could place a lien on the property during the recovery phase.
Getting back to the non-countable assets, one motor vehicle is exempt along with household items and personal effects. Wedding rings, engagement rings, and heirloom jewelry are protected, and an applicant can have a prepaid burial plot and $1500 set aside for final expenses.
Term life insurance does not have a cash value, so unlimited term life insurance is permissible, and an applicant can have as much $1500 in whole life insurance coverage.
Spending Down Assets
There is a process that is often referred to as a “Medicaid spend down” that is largely self-explanatory. You can literally spend money to reduce your countable assets, but most people give their children their inheritances in advance.
This can be done through direct gift giving, but that strategy generally is not recommended for a variety of reasons. Alternatively, you could create and fund a special type of trust that allows you to maintain the control and benefits of your assets, and have those assets not be counted against you for Medicaid eligibility. That arrangement would allow you to qualify for Medicaid to pay the cost of your care, and your assets would be protected for you and your family. The rules regarding the creation and funding of such trusts are quite complex, so you should consult with an expert estate planning and elder law attorney in utilizing this strategy.
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Alzheimer’s is definitely a looming threat, and there are other reasons why people require nursing home care late in their lives. Some aspects of this equation are out of your control, but you can make sure that you protect your legacy for the benefit of your loved ones.
If you are ready to work with a Rochester, New York elder law attorney to develop a plan for aging, we are here to help. You can send us a message to request a consultation appointment, and we can be reached by phone at (585) 546-1734.