There is a psychological barrier that you have to cross at some point if you are going to preserve your legacy for the benefit of your loved ones.
We are conditioned to be self-sufficient, and anything less, that this is considered to be unacceptable. If you have surgery or break a bone, you probably downplay it and tell everyone that you will be back on your feet as soon as possible.
This type of can-do attitude can be beneficial on the one hand, but on the other hand, it can get in the way when you start to get older.
It is hard to imagine a time when you will become unable to take care of all of your own day-to-day needs when you have never experienced it. At the same time, you can use the experiences of others to gain logical insight.
Long-Term Care Statistics
According to the United States Department of Health and Human Services (HHS), 52 percent of seniors will need some type of paid living assistance. Just over 50 percent will require the care for less than one year, and 19 percent are in the one-to-two year range.
Twenty-one percent need paid care for two to five years, and 13 percent of seniors that require assistance receive the care for more than five years.
If you go through life with the assumption that you will never need paid care, you are taking a very significant gamble, and you will get a feel for the stakes when you read the next section.
2020 Cost of Care Survey
Genworth Financial conducts annual surveys to keep a finger on the pulse of the state of long-term care costs in the United States. According to their research, the median annual charge for a home health aide last year was $62,920.
For a one-bedroom apartment in an assisted living community, the median charge was $62,157. A semi-private room in a nursing home came with an annual price tag of $148,555, and the figure was $161,695 for a private room.
Medicare to the Rescue?
There are those that assume that Medicare would cover long-term care if you need it. If most seniors will need paid care, a program that exists to meet the health care needs of seniors must cover it, right?
This is not an illogical assumption on the surface, but in fact, Medicare does not cover custodial care.
Medicaid Planning
Medicaid is a jointly administered federal/state government health insurance program that will pay for long-term care. Since it is intended for people with a significant level of financial need, there is a $15,900 asset limit in 2021, but your home is not a countable asset.
There is an equity limit of $906,000, and you have to be concerned about Medicaid estate recovery. If you qualify for Medicaid as a homeowner, a lien can be placed on the property if it is still in your possession at the time of your death.
It is possible to fund an irrevocable, income-only Medicaid trust in an effort to position your assets with future Medicaid eligibility in mind. The “future” part is key, because the trust must be funded at least five years before you apply for Medicaid coverage.
Schedule a Nursing Home Asset Protection Consultation!
As you can see, long-term care costs could potentially consume a good bit of your legacy if you have to pay for it out of your own pocket. Medicaid eligibility is the widespread solution, and most people in nursing homes are enrolled in the program.
When you take the right steps, you can live in comfort during your golden years and go forward with the knowledge that you have this base covered. The ideal way to proceed will depend on the circumstances, so your plan should be custom crafted to match your situation.
We would be more than glad to help you put a plan in place, and you can schedule an appointment at our Rochester elder law office if you call us at 585-374-5210. If you would rather send us a message, fill out our contact form and we will get back in touch with you promptly.
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