Thanks to modern medicine, Americans are living longer than ever. While this longevity can give you more time to spend with loved ones or complete items on your bucket list, it also increases the likelihood that you’ll need long-term care in your twilight years, either at home or in a nursing facility. Sadly, the cost of this care can be astronomical.
If you’re looking to the future and wondering how to pay for long-term care, Skeeters, Bennett, Wilson & Humphrey’s caring and capable Kentucky lawyers can help you explore your options. Here’s a brief overview of what our estate planning and elder law attorneys discuss with clients concerned about the cost of long-term nursing care.
Planning Ahead for the High Cost of Long-Term Care
Seven out of ten people will require long-term care in their lifetime. Whether it’s in a nursing home, an assisted living facility, or your own home, this care is expensive.
Genworth Financial’s Cost of Care Survey puts national median monthly costs at $9,034 for a private nursing home room, $4,500 for a one-bedroom unit in assisted living, or $5,148 for a home health aide. Though these numbers are from 2021, long-term care costs show no signs of declining.
What About Medicare and Medicaid?
Counting on Medicare or Medicaid to pay for long-term care? Without advanced preparation and a thorough understanding of these programs, this approach can be a recipe for disaster.
Medicare provides very limited coverage for long-term care. It can help pay for up to 100 days in a skilled nursing facility if you need physical therapy, occupational therapy, and other high-level nursing care—but only following a qualifying hospitalization, and you may be required to pay a portion of the daily costs for part of your stay.
Meanwhile, though Medicaid does pay for long-term care services, the program has strict income and asset limits that require many seniors to “spend down” to qualify. However, if done improperly, this can increase how long you have to wait to be eligible for coverage.
Planning ahead offers the most—and best—options for paying for long-term care. In many cases, it can also protect your hard-earned assets and income from going toward nursing costs, so you can preserve them for future generations.
Options for Paying for Long-Term Care
There are three main ways to pay for long-term nursing care, all of which benefit from as much advanced planning as possible.
Private Pay
You can use money from checking and savings accounts, investments, or the sale of your home to pay for long-term care services, either in your new, downsized residence or the facility of your choice.
Unfortunately, unless you’re independently wealthy, paying for long-term nursing care out of pocket can quickly become unmanageable. You’ve worked hard for what you have. Don’t let it be lost to nursing home costs.
Long-Term Care Insurance
You can use money from checking and savings accounts, investments, or the sale of your home to pay for long-term care services, either in your home or the facility of your choice.
Unfortunately, unless you’re independently wealthy, paying for long-term nursing care out of pocket can quickly become unmanageable and will result in the reduction, or complete elimination, of your estate. An experienced estate planning attorney can discuss your options to avoid this outcome.
Long-Term Care Insurance
Long-term care insurance can help you pay for wide-ranging services, such as skilled or non-skilled nursing care at home or in adult day cares, nursing homes, memory care facilities, assisted living communities, and hospice. However, coverage can vary dramatically by insurer and policy. Review policies carefully before purchasing to ensure they cover the types of care you require in the setting you prefer.
Also, it’s essential to keep in mind that long-term care insurance isn’t the best option for everyone. If you’re in poor health or of advanced age, you could face higher premiums or be denied coverage.
Medicaid
Kentucky Medicaid covers long-term care for individuals who have limited assets and income and require nursing care or rehabilitation services.
In 2023, a single person applying for nursing home Medicaid coverage must have a monthly income of less than $2,742 and assets under $2,000. While most assets are countable, there are numerous exemptions, including personal belongings, household furnishing, one vehicle, IRAs or 401(k)s, and a primary home, in some circumstances.
Many Kentucky seniors won’t qualify for Medicaid without reducing their countable assets. If you think that means you can give away property until you meet the asset limit, think again. The Bluegrass State implements a five-year Medicaid Look-Back Period to prevent exactly that.
When you apply for Medicaid, the agency combs through your asset transfers for the past five years looking for valuables that were gifted or sold below fair market value. Look-back violations can lead to penalty periods of ineligibility, meaning you’ll have to wait even longer for the Medicaid long-term care coverage you need. Don’t risk it. The elder law attorneys at Skeeters, Bennett, Wilson, and Humphrey are well-versed in Medicaid’s rules and can assist you with the process. We can advise on options to protect your assets while still qualifying for Medicaid. Often we can protect assets for clients with resources and income well in excess of Medicaid’s limits, ensuring that our clients can leave a legacy to their families and not lose everything to the costs of long-term care. Get experienced legal guidance to help you discuss your options by contacting us today.