are federal laws that will enable you to avoid paying thousands of
dollars out of pocket for nursing home costs. The government will
not notify you of your eligibility. You must find out for yourself.
If you are like most people, you have been saving for the future and
planning for your retirement, wanting to protect your assets to pass
on to your heirs rather than have everything you've earned and saved
go to a nursing home or care facility. Unfortunately, people sometimes
overlook the need to protect against this. For many families, this
topic seems overwhelming to discuss or understand.
According to the Boston Globe, 60% of people who reach the age of
65 will spend time in a nursing home. The average stay is 2.5 years
and costs over $40,000 per year - and the cost is climbing. There
are only three ways to pay for this care:
l Family assets
l Long-term care insurance
Few seniors can afford long-term care insurance. Those who can typically
will pay these costs until most family assets are depleted and then
they will apply for Medicaid. However, with proper planning, you can
qualify for benefits before your assets are gone. Since three out
of every five people statistically will spend time in a nursing home,
planning for the long term is a must.
Medicaid is an extension of a program created in 1965 by the Social
Security Act, Title XIX. It is the primary provider of long-term care
benefits for seniors and cannot legally be denied to those who qualify
and choose to participate.
However, benefits are not automatic. You must plan in advance in order
to get the most benefit possible. Financial and estate planners must
not overlook Medicaid planning as part of an overall plan to protect
and preserve their clients' assets. Unfortunately, most planners are
not well informed or are misinformed regarding this type of planning.
Too much of the following assets can keep you from qualifying for
Trusts - Mutual funds
Cash - Savings accounts
CD's - Bonds
Stocks - Real estate (other than your home)
Life insurance (if the face amount is less than $1,500)
A single person is allowed up to $2,000 in cash (may vary by state),
their principal residence, and personal/household property. An at-home
spouse is allowed some additional assets, which will vary from state
to state and are adjusted annually.
Note: gifting away assets in excess of Medicaid limits prior to application
can cause you to be disqualified for benefits.
Some states set monthly income limits, or "income caps," for the person
entering the nursing home. In income-cap states, the income of the
healthy spouse is not considered when determining eligibility. If
you live in an income-cap state, you will NOT qualify for Medicaid
if you exceed your state's income limits. Consult with an elder law
attorney or financial advisor for options in your state.
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