By Barry Zimmer on August 11th, 2020 in Elder Law
Before we hone in on the news that we want to cover here, we should explain some facts about the state of long-term care in this country.
If you think that it is unlikely that you will ever need living assistance, you should stop over to the LongTermCare.gov website. It is administered by the United States Department of Health and Human Services, and there is a lot of information there that is quite enlightening.
According to the site, about 70 percent of all senior citizens will eventually need living assistance of some kind. Right around 35 percent of these individuals will ultimately reside in nursing homes.
Clearly, there is a very good chance that you will require help with your activities of daily living toward the end of your life. The implications are quite profound from a legacy planning perspective.
Medicare Gap
Most senior citizens will qualify for Medicare coverage when they reach the age of 65. Since it is a health care program that is designed to meet the needs of seniors, and most of them will need long-term care, you would assume that Medicare would pay for a stay in a nursing home.
While it does not seem fair to many, this program does not pay for custodial care. You are on your own, and it is not easy to get out a checkbook to cover your own nursing home costs.
Long-Term Care Expenses
We practice in the greater Cincinnati area, and according to Genworth Financial, the median monthly charge for a private room in a nursing home here was $9779 in 2019. If you do the math, this comes out to $117,348 for a year, which is the average length of stay.
You can multiply that by two if you are married and both you and your spouse require nursing home care. This would pretty much wipe out the legacies that most people have to leave to their loved ones.
Medicaid Eligibility
The situation is not as dire as it may appear to be on the surface, because Medicaid does pay for long-term care. Of course, the only problem is the fact that it is a need-based program. There is a $2000 are limit on countable assets, and there are income limits.
A lot of things that you own are not considered to be countable, and if a healthy spouse can still live independently, that spouse can keep half of the shared assets up to a certain limit. We will get into the details in another blog post.
Nursing home asset protection planning will typically include acts of gift giving to reduce the amount of your countable assets. This can be an effective strategy, but all divestitures must be completed at least five years before you apply for Medicaid coverage.
CARES Act Financial Stimulus Payments
When Congress passed the CARES Act as a response to the economic damage that has been caused by the novel coronavirus, it included a $1200 payment to most Americans. This extends to seniors that are residing in nursing homes.
Unfortunately, there have been reports about nursing homes keeping checks that were sent out to residents. Under the terms of the legislation, the payments are considered to be tax credits; they are not income or “resources” in a Medicaid eligibility context. As a result, a nursing home that takes the money is violating the law.
If you have a loved one in a nursing home, you should definitely make sure that they got their payment. You can apply the appropriate pressure if the nursing home in question did not comply with the mandate to distribute the funds appropriately.
Attend a Free Webinar!
We do everything possible to educate members of our community about the importance of estate planning and elder law matters like nursing home asset protection. Traditionally, we have held seminars on an ongoing basis, but we have been forced to put them on hold because of COVID-19 concerns.
However, you can still get all the same valuable information delivered to your own home. That’s right, our seminars have been converted over to webinars, so we haven’t skipped a beat. To see the schedule and obtain registration information, visit our webinar page.