According to government statistics, a person who turns 65 years old today will have a 70 percent chance of needing long term care, at some point, during their remaining years. Women, on average, receive 3.7 years of long-term care, while men receive 2.2 years. Moving into a long-term care home or facility can be daunting. Figuring out how to pay for it can be an equal challenge. Below are some frequently asked questions regarding long term care planning.
How Much Does Long Term Care Cost?
According to the Maryland Long Term Care Insurance Partnership Program, national averages for long term care are as follows:
- Semi private room in a nursing home—$6,844 per month;
- Private room in a nursing home—$7,698;
- Single bedroom room in assisted living facility—$3,628 per month;
- In home health aide— $20.50 per hour;
- Homemaker services—$20 per hour; and
- Adult day care services—$68 per day.
Will My Parents Have to Spend Down Their Life Savings?
Each family’s situation is unique. Some family’s have planned ahead and have long-term care insurance. Other family’s have a limited nest egg and want to preserve that for the spouse or children, as a legacy or inheritance. Other families are able to implement planning strategies to qualify for Medicaid assistance. In most cases, with a little pre-planning, we can help preserve your assets in a way that provides for you, your spouse, children and long term care. The important thing is to plan ahead. Our Free Guide to Long Term Care Planning can help you get started!
How Do I Pay For Long-Term Care?
There are a variety of ways to pay for long term care. Selling assets, selling real property such as a house, purchasing a long-term care insurance policy (which would have to be done in advance), or getting a reverse mortgage are a few options. Another option would be to qualify for Medicaid, which can pay a substantial portion of your long-term care. However, qualifying for Medicaid is only possible if you have very few assets, or those assets are protected in a long-term care trust.
But Doesn’t Medicare Cover Long-Term Care?
Medicare does not cover long-term care, intermediate care, or custodial services. Medicare only covers limited skilled nursing and rehabilitation in specific facilities for a very limited period of time, usually up to a maximum of 100 days. Some Medicare supplemental policies will pay for at-home rehabilitative services, which is considered short-term care.
How Will My Assets Be Protected With a Long Term Care Trust?
In order to qualify for Medicaid, one’s assets must be below the threshold (currently $2,500 in Maryland as of this writing), which excludes vehicles, clothing, and a primary home. However, by creating a long-term care trust at least five years in advance of needing long term care, you can “spend down” your wealth and still qualify for Medicaid, and the funds in the long-term care trust are yours to keep and use. However, you may be required to pay for some of the costs of your long term care. If you home’s equity is greater than $572,000, the home will be counted as a resource and will not be excluded. As such, it is important to speak with an attorney about your options for long term care and how to receive federal funding through Medicaid.
Estate planning involves looking at all the aspects of your assets, long-term care, and other financial considerations. Be sure to download our Free Guide to Wills, Trust & Probate which has valuable information on the pros and cons of Wills versus Trusts, and what you need to know about the probate process.
Download the Free Guide to Long Term Care planning for more information or give us a call for a free consultation.
Contact a Maryland Long-Term Care Planning Attorney
By working with a long-term care planning attorney, you can protect your assets while still qualifying for Medicaid. For more information, contact the Maryland long term care planning lawyers at Frame & Frame today at 410-255-0373 to schedule a consultation.