The longer you live, the higher the better the odds are that you will one day need long-term care. The cost of that care can be staggering for the average person. Moreover, you cannot expect any help covering your long-term care (LTC) costs from Medicare nor from most basic health insurance policies. For over half of all seniors, that leaves Medicaid as the only hope for help covering LTC costs. Qualifying for Medicaid, however, can be difficult if you failed to plan ahead. The good news is that a Medicaid lawyer can help ensure that you qualify when the time comes by helping you incorporate Medicaid planning into your estate plan now.
Will You Need Long-Term Care?
Unfortunately, there is no way to know whether or not you will need LTC when you reach your “Golden Year.” Statistically speaking, however, the odds that you will increase with each passing year. When you enter your retirement years you stand a 50-50 chance of one day needing LTC. If you are fortunate enough to still be here at age 85, those odds increase to a 75 percent chance. Given those odds, it only makes sense to plan on needing LTC to ensure that you are prepared in the event that you do.
How Much Does Long-Term Care Cost?
Most people are shocked to find out how much LTC actually costs. Across the nation, a year in a long-term care facility runs, on average, about $80,000 per year, or about $6,500 per month. If you end up needing LTC in the State of New York you can expect to pay considerably more. The average cost for a year in LTC in the State of New York will cost you about $144,000, or almost $12,000 per month. The average length of stay in a LTC facility is 2.5 years.
Can’t I Get Help Covering My LTC Costs?
One of the biggest mistakes people make is assuming that they will have help covering their LTC costs should they end up in a long-term care facility. After all, your health insurance coverage pays for your other healthcare related expenses right? As a senior, Medicare is also supposed to cover your healthcare costs right? Both of those statements are true; however, Medicare specifically excludes almost all LTC expenses and most private health insurance policies do as well unless you purchased a separate long-term care rider and paid an additional premium over the life of your insurance policy. For many people, that leaves paying out of pocket for LTC or Medicaid.
Why Is Qualifying for Medicaid Difficult?
The good news is the Medicaid will cover LTC expenses. The bad news is that qualifying for Medicaid can be difficult because the Medicaid program uses both an income and a “countable resources” limit. The countable resources limit is where most seniors encounter a problem because after a lifetime of working and saving they typically have assets valued above the limit. Furthermore, you cannot just transfer assets out of your name when you decide you need to qualify for Medicaid because the program also uses a five-year “look-back” rule that effectively review your finances for the five-year period prior to your application and discounts any asset transfers made for less than fair market value.
How Can a Medicaid Lawyer Help?
The key to qualifying for Medicaid as a senior, without putting your asset at risk, is to include Medicaid planning in your estate plan long before you actually need to qualify for benefits. Medicaid planning uses legal tools and strategies to protect your assets and set you up to be eligible for Medicaid. For example, you might decide to create a Medicaid trust into which you will transfer assets. Because the trust is a separate legal entity, assets transferred into the trust are no longer considered part of your estate for purposes of determining your eligibility for Medicaid.
For more information, please download our FREE estate planning worksheet. If you have questions or concerns relating to Medicaid eligibility, contact an experienced Medicaid lawyer at the Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.