Most seniors qualify for Medicare coverage, and it goes a long way, but there are out-of-pocket costs. When you are putting together a budget for your golden years, you should prepare to pay Medicare premiums, copayments, deductibles.
These are manageable for most seniors that plan ahead effectively, but there is one huge gap that can wipe out the inheritances that you would like to leave to your loved ones.
Nursing Home Costs
About 70 percent of senior citizens will need help with their day-to-day needs at some point in time, and 35 percent of elders will live in nursing homes. Medicare does not pay for long-term care, and this is the major gap we are highlighting.
Here in North Carolina, you can expect to pay about $96,000 for a year in a nursing home. Costs have been going up year after year, so if you need care in a couple of decades, the number may be a lot higher.
The average length of stay is one year, and if you are married, your family may face two different sets of nursing home bills. That’s a lot of money to come up with late in your life.
Medicaid Eligibility
The solution for most people is Medicaid coverage. This government health insurance program does pay for living assistance if you can qualify.
Since it was designed to provide health insurance for people with financial need, there is a low asset limit. To qualify for Medicaid to pay for long-term care, you could give gifts to your loved ones while you are living.
This is called a Medicaid “spend down,” but you have to plan ahead carefully to do this the right way, because there is a five-year look back period. You have to complete all gift giving at least five years before you apply for Medicaid coverage.
It would still be possible to qualify, but there would be a penalty period. For example, if you gave away enough to pay for a year of nursing home care, you would be ineligible for one year.
Income-Only Medicaid Trust
You could give direct gifts to your loved ones with the five-year look back period in mind, but there is another option that is better for some people. An income-only Medicaid trust can be used to get assets out of your own name so you can qualify for coverage if you need it.
The principal would not be available, but you would be able to receive income that is generated by assets in the trust. If you do qualify for Medicaid at some point, most of the income would go toward the cost of the care that you are receiving.
Caregiver Children
There is one exception to the rule when it comes to the Medicaid look back period. If one of your adult children has been caring for you in your home for at least two years, you can give the property to your child. In these situations, there would be no penalty, and Medicaid could not go after the home after your passing.
Elder Abuse
Long-term care is the most pressing elder law situation that we handle on a day-to-day basis, but there are some others. One of them is elder abuse, and it can be physical, emotional, or financial. There are things that you can do to protect yourself, and we can explain them when you connect with our firm.
North Carolina Elder Law Resources
There are some very useful resources that you can tap into if you are interested in these elder law issues. One of them is the Medicare and Seniors Health Insurance and Information Portal.
This page provides instant access to numerous different providers of health insurance resources for North Carolina seniors.
Many families are touched by Alzheimer’s, a horrible disease that strikes about one third of the oldest elderly. You can obtain information about the disease and access to resources if you visit the Alzheimer’s Association website.
Get in Touch Today!
We know that this is a very tough subject, and there is nothing good to say about it. At the same time, it’s a fact of life, and it is best to do what you can to get ahead of it.
If you are ready to talk about a plan for aging, we are here to help. You can call us at (864) 268-8244 to set up a consultation, and there is a contact form on this site that you can use to send us a message.