The chances you’ll live in a nursing home at some point in your life rise considerably the older you get. According to the Census Bureau, only about 1% of people between 65 and 70 live in an extended care or nursing home facility, but by the time someone reaches 90, that percentage rises to more than 20%. The prospect of having to pay for such care is not a pleasant proposition, as nursing home costs can easily erode a senior’s assets.
The average cost of nursing home care can easily be $134,000 or more per year. Medicare will only pay for very limited initial extended care costs, and Medicaid will only pay if the person meets very strict income and asset criteria. Also, unless a person has extended care insurance, most private health insurance plans will not cover any nursing home care costs.
For those concerned about nursing home costs eroding their assets and draining any savings, Medicaid planning is one possible option. Medicaid planning involves structuring your assets so that you meet Medicaid eligibility criteria. Because Medicaid allows for a five-year “look back” time period, it is best to begin your Medicaid planning efforts well before you think you will need nursing home care.
A good Medicaid plan will use a variety of tools to allow you to qualify for the program, including gifts, trusts, and other types of estate planning devices, though planning ahead is very important.
Michael Robinson, Estate Planning Attorney
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