If you are an adult who has parents that are getting older, you may be concerned about potential nursing home costs. This is something that you should certainly take seriously, because nursing homes are extremely expensive, and Medicare does not pay for long-term care.
When you look at the current state of long-term care costs, the numbers are pretty attention-getting. We practice law in the Indianapolis area. Fortunately, in our area nursing home costs are lower than they are in some of the more expensive areas of the country, but they are are still higher than the national averages.
According to Genworth Financial, the median annual charge for a private room in a nursing home in the greater Indianapolis area is $97,411. When you mix in the fact that many people require multiple years of care, you can see why these expenses loom large.
Here’s another fact that you should consider: Most seniors will need living assistance at some point in time. In fact, the figure is 70 percent according to the government website LongTermCare.gov.
Nursing Home Asset Protection
There are certain steps that your parents can take to protect assets prior to entering a nursing home. Long-term care insurance is one option, but it is quite expensive, and though the majority of people do require long-term care, some do not. Plus, there are elders who can receive the limited care that they need at home, and family members and friends can sometimes act as caregivers.
Having the insurance can be comforting, but if you never need to use it, you get nothing for your money.
To prepare for possible nursing home expenses, people often aim toward Medicaid eligibility. You are probably aware of the fact that this is a government health insurance program for people with limited financial resources. Unlike Medicare, Medicaid does pay for long-term care.
Because of the fact that Medicaid is intended for people with financial need, there is a limit on countable assets. This limit is just $2,000 for an individual, so people often give assets to their children before they apply for Medicaid.
If your parents decide to go this route, they should be aware of the Medicaid look-back. The gift giving must be completed at least 60 months before the application is submitted. Eligibility for Medicaid coverage is delayed if this rule is violated.
This is where long-term care insurance could be useful. A parent could purchase the insurance for protection during this look-back.
There is one exception to the five-year look-back rule. If you were to live with a parent in his or her home as a caregiver for at least two years before the submission of the Medicaid application, your parent could give you the home, and the five-year look-back would not apply.
Medicaid Planning Consultation
You should certainly do everything possible to assist your aging parents when it comes to understanding the Medicaid program as it applies to long-term care for seniors. If you would like to discuss things with an elder law attorney, we can help.
Our firm offers free consultations, and you can send us a message through our contact page to set up an appointment: Indianapolis IN Medicaid Planning.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.