If you work and pay FICA or self-employment taxes for a minimum of ten years, you will qualify for Medicare when you reach the age of 65 under current laws. Medicare is also available to the spouses of people that meet this requirement. We include the caveat “under current laws” because some legislators consistently talk about raising the age of eligibility. This is a matter that you should stay abreast of when you are looking ahead toward your senior years.
Medicare provides a solid health insurance underpinning, but it does not pay for everything in full. Medicare Part A is the portion of the program that pays for hospitalization. There is no monthly premium for this coverage, but there is a per benefit period deductible, and there can be very significant co-payments for especially long hospital stays.
The segment that covers visits to doctors and outpatient care is Medicare Part B. There is a monthly premium for this coverage, and in 2019, most people pay $135.50. It can be higher if you are in an upper income bracket. During the current calendar year, the annual deductible is $185.
These expenses are not enough to cause any worries for most people, but there is a rather significant factor to take into consideration. Medicare will only pay for 80% of the bills that are covered under Part B. You have to pay the rest out of your own pocket.
Part C allows you to use your Medicare benefit to go toward the cost of private insurance that is more comprehensive in nature. The prescription drug piece of the program is Part D, and there are co-payments, premiums, deductibles that go along with this coverage.
As you can see, if you add all of this together, it can be relatively significant. It is important to get a handle on these costs and budget accordingly when you are planning for your retirement years.
The Big Void
United States Department of Health and Human Services maintains a website that is called longtermcare.gov. There are a lot of interesting statistics on the site, and one of them is attention getting to say the least. If you are turning 65 on this day, there is a 70% chance that you will eventually need help with your activities of daily living.
Plus, if today is your 65th birthday, longevity statistics tell us that it is likely that you will live into your mid-80s and perhaps beyond. A very significant percentage of Americans in this age group have Alzheimer’s disease, and many people with the disease require nursing home care. Of course, there are other underlying reasons why some elders require a level of care that can only be received in a nursing home.
Since Medicare is designed for seniors, and most of them will need long-term care, you would logically assume that it is covered. It does not make sense to many people, but Medicare will not pay a penny to defray nursing home costs.
Medicaid Planning
Now that we have provided the necessary background information, we can answer the question that serves as the title of this blog post. The reason why Medicaid can be quite relevant even if you are enrolled in the Medicare program is because Medicaid will pay for a stay in a nursing home.
Most people are aware of the fact that coverage is only available to people with very limited financial resources. In New York, the limit is just over $15,000. Some property that you may own is not counted, including your home in some circumstances. The other exempt property would include personal effects, household items, wedding and engagement rings, and, sometimes, one motor vehicle.
You can give assets to your loved ones in an effort to gain Medicaid eligibility, but you have to plan ahead in advance in an intelligent manner. If you divest yourself of assets within 60 months of the submission of your application, you will be deemed ineligible for a prescribed period of time. During this interim, you would be forced to pay out-of-pocket, and it could be years depending on the amount of the divestitures.
Schedule a Nursing Home Asset Protection Consultation Today!
If you have concerns about your legacy given the information that we have shared here, you are not alone. We would be more than glad to discuss nursing home asset protection strategies with you in person, and you can send us a message to request an appointment or call us at (585) 374-5210.
