Many people are surprised to hear that 70 percent of senior citizens will eventually need some form of living assistance.
The United States Department of Health and Human Services states that 35 percent of elders will eventually reside in nursing homes. You may not be too concerned if you know that you will qualify for Medicare, but in fact, this program does not pay for living assistance.
We are going to look at the solution in this post with an emphasis on the Medicaid Home and Community Based Services (HCBS) Waiver. Before we get there, we will share some eye opening information to provide the appropriate context.
Long-Term Care Costs
Genworth Financial is a company that sells financial products for senior citizens. Because of their demographic, they track the current state of long-term care costs in the United States.
To this end, they conduct extensive research on an annual basis, and they publish it for all to see on their website.
We practice law in Naperville, Illinois, and the surrounding area. Their study for 2020 found that the median annual cost for a private room in a nursing home in our area was $102,383. The figure for a semi private room was $96,907, so you don’t save much if you sacrifice some privacy.
The median charge for a year in a one bedroom unit in an assisted living community was $59,400. For an in-home health aide, the rate was $60,632. The costs have been trending upward over recent years, so the figures may be considerably larger a decade from now.
The Medicaid Solution
Now that you have shared the necessary background information, we can get to the solution.
Medicaid is a jointly administered federal/state government health insurance program. It will pay for long-term care, but it is only available to people that can demonstrate a significant level of financial need.
There is an asset limit of just $2000, but some things do not count. We will get into all the details with regard to countable and non-countable assets at a different time.
However, it is important to note the fact that your home is not counted when Medicaid is determining your eligibility status. There is a $603,000 equity limit in 2021, but there is no limit when a healthy spouse will be remaining in the home.
Though you can qualify as a homeowner, there is an important consideration. Medicaid would be required to seek reimbursement from your estate after your passing. They could place a lien on the property if it is in your possession at the time of your death.
Medicaid HCBS Waiver
If you are capable of receiving the care that you need in your own home with the assistance of a health aide, may be able to qualify for the Medicaid Home and Community Based Services Waiver.
It would cover your in-home care costs if you can gain eligibility. If you couple paid assistance with the right modifications, you can potentially get the care that you need in the comfort and familiarity of your own home.
To qualify for Medicaid or the HCBS Waiver to pay for long-term care, you could convey your home and other countable assets into an irrevocable, income-only trust. You would surrender access to the principal, but you could receive distributions of the trust’s income.
If you fund the trust at least five years before you apply, the assets would not count.
Schedule a Consultation Today!
As you can see, you should definitely brace yourself for future long-term care costs to preserve your legacy for the benefit of your loved ones. Each situation is different, and there is no one approach that is right for everyone.
Personalized attention is key, and this is exactly what you will receive when you choose our firm.
Plus, if your estate plan has not been reviewed in many years, it is very possible that changes may be in order. We would be more than glad to provide the appropriate revisions if you are in this situation.
You can schedule a consultation if you call us at 630-568-8611, and you can use our contact form if you would rather send us a message.
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