Most people prefer not to think about the possibility that they will need long-term care at some point down the road. That possibility, however, becomes more of a probability the longer you live. Failing to acknowledge the likelihood that you will need long-term care in the future could result in you not being prepared to cover the costs of that care when the time comes. The best way to avoid ending up in this situation is to work closely with a Missouri elder law attorney who can help you incorporate long-term care planning into your existing estate plan.
Will You Need Long-Term Care?
Most people realize the possibility exists that they (or their spouse) could need long-term care down the road; however, few people realize just how likely of a possibility that is. At age 65, both you and your spouse (if applicable) stand about a 50-50 chance of eventually spending time in a long-term care facility. If you make it to age 85 those odds jump to a 75 percent chance of eventually needing long-term care. Furthermore, with an average length of stay in a long-term care facility running about 2.5 years there is a very real chance that long-term care expenses will have a significant impact on your life down the road.
How Much Will Long-Term Care Cost You?
Knowing you might end up in a long-term care facility may be something you prefer not to think about; however, you need to think about the cost of that care or your estate will suffer down the road. Nationwide, you can expect to spend, on average, about $80,000 per year for long-term care as of 2016. Fortunately, for Missouri residents, long-term care costs tend to run below the national average with the average cost of a year in a long-term care facility running just over $60,000 a year. While Missouri residents may pay less than others across the nation, if your stay is in line with the national average of 2.5 years, you are still going to incur a long-term care bill of about $150,000. For the average person, a $150,000 medical bill is not something they can easily pay out of pocket.
Won’t My Insurance or Medicare Help?
Before you assume you are already covered by your existing health insurance and/or Medicare, think again. First, most employer sponsored or privately purchased health insurance policies terminate when you reach retirement age. Even if your policy continues past age 65 it will likely not help you much because most basic health insurance policies exclude long-term care expenses unless you purchased a long-term care rider at a significant additional cost. Likewise, Medicare does not cover long-term care costs except under very narrow circumstances, and evcn then only for a short period of time.
How Can Long-Term Care Planning Help?
The good news in all of this is that there is potentially help available for the costs you may incur should you end up needing long-term care. Medicaid does cover long-term care expenses for eligible program participants. The problem for many seniors, however, is meeting the eligibility requirements without first depleting the majority of their estate assets. Medicaid is a “needs based” assistance program that provides healthcare coverage to low income individuals and families. Because it is intended to be used by low income recipients, applicants must meet both income and assets requirements in order to be approved. As a senior on a relatively modest fixed income the income limit may not be a problem; however, if you have spent a lifetime building up your estate assets the value of those assets is likely to exceed the program limits. This is particularly likely given the fact that the asset limit is often as low as $2,000 for an individual.
For additional information, please join as at one of our upcoming free seminars. If you have additional questions or concerns about trusts, or appointing a Trustee for a trust, contact the experienced Missouri estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.