What You Should Know About Your Options

You’re going to want to talk to both financial and legal professionals to determine the best way to pay for long-term care while protecting your personal assets, but here are some things you should know from the start.

There Are Three Primary Ways To Pay For Long-term Care:

  1. Some people have the resources to pay for their care with their own funds. But with the average semi-private and private room in a nursing home costing more than $200 and $250 per day respectively according to longtermcare.gov most people will soon run out of funds.  
  2. Long-term care insurance can help with the cost, but few have enough coverage to pay for all of the care they need.
  3. Many people use Medicaid benefits to pay for their long-term care. While you might think you won’t qualify for Medicaid until you have depleted funds of your own, this is not the case. While Medicaid is based on financial need, there are ways to qualify for Medicaid without having to first spend your money or give it away.

 Here Are Some Examples Of What Different Sources Of Funds Will Cover:

 MedicareMedicaidPrivate FundsLong-Term Care InsuranceVeterans' Benefits

Adult Day Services

No

Some Instances

Yes

No

Yes

Alzheimer's & Dementia

Not unless they meet criteria for short-term rehab

Yes

Yes

Depends on type of policy

Yes

Assisted Living

No

Some States

Yes

Depends on type of policy

Yes

Continuing Care Retirement Community

Depends on level of care required

Depends on level of care required

Yes

Depends on type of policy & level of care required

Depends on level of care required

Home Care

For skilled services if person meets criteria

Some Instances

Yes

Depends on type of policy

Yes

Skilled Nursing Care

For skilled rehab visit only

Yes

Yes

Depends on type of policy

Yes

 

Some Important Considerations When Choosing Medicaid:

You don’t want Medicaid to be your only source of funds.

Contrary to what you might have heard, you do not want to spend all of your assets and be solely reliant on government benefits because Medicaid will not cover all of your costs. If you spend all of your assets and then use Medicaid to pay for your long-term care, you will not have the money you need to pay for important needs that Medicaid doesn’t cover.

It may be too late to simply give away your assets to qualify for Medicaid.

The government looks back five years for gifts made after February 8, 2006 and 3 years for gifts made prior. If the government identifies that you made a gift during that time, you will be ineligible for Medicaid for a period of time. It could be months or years before you qualify depending on how much you gave away, your state's rules, and when the gift was made. You should always consult an elder law attorney before making gifts.

A new deed can protect your home.

A special kind of "life estate" deed may allow your property to automatically pass to your heirs upon your death while allowing you to qualify for Medicaid. This is more complex than simply adding people to your deed and requires the advice of an estate, probate or elder law attorney.

Consider creating a Medicaid-friendly durable power of attorney.

An elder law attorney can establish a Durable Power of Attorney for you that protects your assets and helps with other aging issues in ways a regular durable power of attorney doesn’t. You can pick someone to make decisions for you if you are unable to.