As elder law attorneys, we are tightly focused on matters that are of interest to senior citizens. According to the U.S. Census Bureau, 10.6 percent of people in Rochester were 65 years of age and older in 2019. This is a very significant portion of the population, and these folks have concerns about the eventualities that they may face as time goes on.
There are a number of different elder law issues that are a source of concern at the present time, including physical and emotional elder abuse and elder financial abuse. We will cover these threats in another post, but on this day, we will take a look at long term care and the costs that go along with it.
Don’t Overestimate Medicare Coverage
We are all aware of the fact that Medicare is a health insurance program that is administered by the federal government. It is available to people when they reach the age of 65 if they have worked and paid taxes for at least 10 years.
If you have not worked much, but you are married and your spouse has paid into the program for at least a decade, you would be eligible for coverage.
Unfortunately, Medicare does not pay for everything in full. There are relatively significant out-of-pocket expenses, including co-payments, co-insurance, deductibles, and premiums. You should look into these costs and make sure that you are ready to address them when you are budgeting for your retirement years.
It should be noted that Medicare supplement insurance is available to fill these gaps. Medicare Part C allows you to use your Medicare benefit to go toward the cost of more comprehensive private health insurance. These possibilities should be explored as well when you are looking ahead toward the future.
On top of these costs, there is an enormous gap in the coverage that is something that everyone should take very seriously. Since Medicare is designed to help with the health care costs that will be incurred by senior citizens, you would think that it would cover long-term care, because most elders will need it eventually.
Many people would say that it does not make sense and it is not fair, but if you ever have to spend time in a nursing home, don’t expect any relief from the Medicare program. It will pay for convalescent care after an illness or injury, but it will not pay for the custodial care that you would receive in a nursing home.
This is a very big deal, because nursing homes are extremely expensive. In the Rochester area, you can expect to spend more than $170,000 a year, and costs have been rising on a continual basis. The expenses will probably be much higher if you need long-term care in 20 or 25 years.
What’s the Solution?
One of the reasons why a lot of people think that it is not fair that Medicare does not cover long-term care is because of the fact that Medicaid will pay these expenses. This is a program that is only available to people with very limited financial resources. Of course, some hard-working people do not make much money, and there can be other extenuating circumstances.
However, the bottom line is this: if you have nothing when you are an elder, the government will pay for long-term care, but if you have any resources to speak of, you are on your own.
The limit on countable assets in 2020 is just $14,750, but your home may not be counted, one vehicle may be exempt, and your personal belongings are not countable assets. When it comes the resources that are countable, you can give them to your loved ones before you apply for Medicaid coverage.
You would in essence be giving them their inheritances in advance, because it is very likely that the nursing home will be your final place of residence. This may sound like a simple solution, but it is easier said than done, because there is a five-year look back period. You have to complete the gift giving at least 60 months before you apply to gain immediate coverage. However, with proper planning, you can protect a significant portion of those assets even if you require care before the five years is up.
Schedule a Consultation Today!
As you can see when you digest this information, nursing home costs are a looming threat to your legacy. If you would like to discuss Medicaid planning with a licensed attorney, we would be more than glad to assist you.
You can call us at (585) 546-1734 to set up a consultation appointment, and if you would prefer to reach out electronically, fill out our contact form and we will provide a swift response.