How to pay for long-term care is a question that keeps individuals up at night. For certain families, there may be several options, for others, only one.
Long-term care involves medical and non-medical care to people who have a chronic illness or disability. Most long-term care is to assist people with activities of daily living, such as dressing, bathing, and using the bathroom. Long-term care can be provided at home, in the community, in assisted living or in nursing homes. It is important to remember that you may need long-term care at any age.
Out of pocket is the most common way to pay for long-term care. This means that your income and assets are at risk. This option does allow the person of considerable means to choose a nicer nursing home or location. If you spend all of your assets, you can now apply for Medicaid if you are otherwise eligible.
In order to qualify for Medicaid, which is another way to pay for long-term care, if you are single, all of the income goes to pay the nursing home, while you have to spend your assets down to a minimum level, which is currently $2500.00. If you are married, the spouse not in a nursing home, called the community spouse, can keep their income and perhaps some of the nursing home spouse’s. There is also a certain amount of money that the community spouse can keep, which is a little over $113,000. There are Medicaid planning strategies that may work to preserve some of the assets, but this should be implemented long before the nursing home level of care need arises.
Veteran’s Aid & Attendance and Housebound benefits may help offset some of the costs of long-term care. This benefit is for a wartime veteran or his/her surviving spouse. There are asset and income limits, but the income can be offset by unreimbursed medical expenses, such as Rx’s, copays, home care or assisted living facility or nursing home costs. The restrictions on transfer of assets to qualify for the benefit are also less strict that qualifying for Medicaid. For a married wartime veteran, the pension could be $2000.00 per month.
Long-term care insurance is a great option if you are qualified. This may be something to look into when you are young and the premiums are lower. There are also insurance policies that you can convert to include long-term care benefits. This benefit will have a daily benefit, which hopefully would be over $300 per day, because nursing home costs are $8-10k per month and assisted living facilities are $4-6k. Some long-term care policies also cover home care costs.
The most important thing you can do is meet with an Estate Planning and Elder law attorney to discuss your options. There may be a way to alleviate some of your fears so you can get a good night’s sleep.
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