Long-term care costs are a very pressing elder law concern, and this is something that impacts everyone. According to the United States Department of Health and Human Services, 70 percent of people who are reaching the age of 65 are going to need help with their activities of daily living eventually.
You may not be concerned about long-term care costs because you expect to be qualified for Medicare coverage when you reach the age of 65. If you worked for a significant period of time, you will in fact qualify for Medicare.
Medicare coverage is earned through the accrual of retirement credits. In 2014, you get one credit for every $1200 that you earn. You can accumulate as many as 4 credits in a year. Once you have 40 retirement credits, you will qualify for Medicare when you reach the age of eligibility.
This is well and good, and Medicare will certainly help with your medical expenses. However, this program is not set up to pay for custodial care. This is the type of care that you would receive in a nursing home or assisted living community.Medicare will pay for up to 100 days of convalescent care following surgery, but it does not pay for long-term care.
Cost of Care
You may resign yourself to the prospect of paying for your care out-of-pocket if you do need help with your activities of daily living as a senior citizen. This may be possible, but your pockets may be empty by the time you’re finished paying for your care.
We practice law in the state of Missouri. Genworth Financial tells us that the median annual cost for a private room in a nursing home in our state is nearly $60,000. It is not uncommon for people to spend multiple years in long-term care facilities, so you could be looking at a very significant latter life expense.
Medicaid is another government run health insurance program. Though it is a program that is designed to help people who have very limited financial resources, most seniors in nursing homes are enrolled in this program.
People who want to preserve assets for the benefit of their loved ones often engage in a process called a Medicaid spend down. This is a divestiture of assets.
You could give assets to your family members before you apply for Medicaid. If and when you submit your application, there would be little left in your own name, and you would be able to qualify for coverage.
This can be a bit challenging, because there is a five-year look back. You have to complete your divestitures at least five years before you apply for coverage, or your application will be denied initially.
Medicaid Planning Report
If you are concerned about long-term care costs, download our free special report. This report sheds a lot of light, and it contains a great deal of useful information.
Click this link to access the report: St. Louis MO Medicaid Planning.