We find that many of our clients ask the same questions when they come into the office for consultations. As a result, we felt that it would be a good idea to share a question and answer session that is just like the ones that we often engage in at the office.
What is the role of an elder law attorney?
Elder law attorneys help clients address issues that are of importance to senior citizens.
Will Medicare pay for all of my health care costs when I am eligible for coverage?
If you have worked and paid your taxes for at least 10 years, you will qualify for Medicare when you reach the age of 65 under currently existing laws. Even if you have not done this, if your spouse has achieved this benchmark, you would qualify for Medicare.
Medicare will provide a strong health insurance underpinning, but there are out-of-pocket costs that should be budgeted for in advance. These would include co-payments, deductibles, and monthly premiums, including 20 percent of covered expenses that fall under Medicare Part B.
This is the portion of the program that pays for visits to doctors and outpatient treatments.
What percentage of people will need living assistance at some point in time?
The United States Department of Health and Human Services maintains a very useful website called LongTermCare.gov. According to the site, seven out of every 10 people that are turning 65 on any given day will need help with their activities of daily living eventually. Approximately 35 percent of them will reside in nursing homes.
Medicare will pay for long-term care, right?
It would be logical to assume that Medicare will pay for living assistance, because it exists to provide health care insurance for senior citizens, and most of them will need long-term care.
Whether it makes sense or not, the Medicare program will not pay for living assistance. The type of care that you would receive in a nursing home is considered to be custodial care, and this is not covered.
Is nursing home care affordable?
The question is relative depending on your resources, but most people would say no. We practice in the Rochester area. Genworth Financial does a lot of in-depth research into the state of long-term care costs around the country. They found that the median annual charge for a private room in a nursing home in Rochester in 2019 was $159,505. However, the average cost is $171,550.
This represents a 3.8 percent increase over the 2018 median for a private room. When you look at the facts, you can see that the numbers could be significantly higher if you need long-term care 20 years from now.
Is there any way I can protect my assets from nursing home costs?
Fortunately, there is a widely embraced solution that can allow you to preserve assets for the benefit of your loved ones. Medicaid is a jointly administered federal/state government health insurance program that does pay for nursing home care. Since it is intended for people with limited financial resources, there is a modest limit on countable assets.
Are there assets that are not counted?
Your home is not considered to be a countable asset for Medicaid eligibility purposes, but there is an equity limit. In New York, this limit is close to $900,000. However, Medicaid can force a sale of your home after your death and take the sales proceeds as reimbursement for expenses paid on your behalf; this is knows as “estate recovery.” Household goods and personal effects are not counted, and you can retain ownership of one vehicle. Wedding rings, engagement rings, and heirloom jewelry are not counted, and you can have unlimited term life insurance and up to $1500 of whole life insurance. Prepaid burial plots are not counted either.
What happens if my spouse is entering a nursing home and I am still living independently?
As we stated previously, generally speaking, there is a home equity limit, but there is no limit at all if a healthy spouse is remaining in the home. The healthy spouse can also keep half of the shared countable assets with a limit of approximately $130,000.
Under Medicaid rules, a benefit recipient must contribute almost all of his or her income to defray the cost of the care that is being received. However, this requirement is waived if a healthy spouse is relying on the income to maintain a reasonable standard of living.
Can I give away assets to qualify for Medicaid?
Yes, but you have to complete the gift giving at least five years before you submit your application. If you violate this rule, you are penalized, and your eligibility is delayed.
Schedule a Medicaid Planning Consultation Today!
As you can see, long-term care costs are a looming threat, but there are steps that you can take to prepare yourself in advance. If you would like to discuss nursing home asset protection strategies with one of our elder law attorneys, you can schedule a consultation if you give us a call at 585-374-5210. There is also a contact form on this website you can use to send us a message.