Elder law attorneys have been watching closely as the costs associated with long-term care continue to rise, and it is certainly a source of growing concern. If you are not aware of how high the cost of long-term care has become you’ll probably sit up and take notice when you hear the facts. According to a study that was released by the MetLife Mature Market Institute, in 2010 the average charge for a yearlong stay in a private room in a nursing home in the United States was over $83,500. This represented a 4.6% increase over 2009 costs.
Assisted living community expenses rose at an even higher rate of 5.2% to just under $40,000 annually. If you’re thinking that it is unlikely that you will ever be faced with these costs, the statistics tell a different tale. According to the United States Department of Health and Human Services, seven out of every 10 individuals who reach the age of 60 will ultimately require long-term care. For women, the average length of time the care is required is 3.7 years, and for men it is to 2.2 years. So if you do the math you can see that you may be looking at a pretty hefty expense should you be among the majority who needs long-term care eventually.
Medicare does not help with long-term care costs, but Medicaid will pay them if you can qualify. There is a resource limit of $2000, but some assets don’t count toward this limit, such as your home and your car. With this in mind there are those who engage in what is called a Medicaid “spend down,” which involves divesting yourself of assets in an effort to stay within the resource limit.
Should you choose to do this it is important to realize that there is a five year look-back period. If you give away resources within five years of applying for Medicaid you are penalized and your eligibility is delayed. So if you’re going to spend down you need to devise an intelligent plan well in advance.
If you are interested in learning more about how you may be able to address the high and rising costs of long-term care, simply arrange for a consultation with an experienced elder law attorney.