Long-term care costs are something that you should take very seriously when you are looking ahead toward your retirement years. Medicare does not pay for assisted living, and this can come as a surprise to many people.
When you look into the facts, you find that long-term care costs can be financially devastating. According to the state of Indiana, the average monthly charge for a room in a nursing home is over $5,500. This is an average that takes every area of the state into account. In larger metropolitan areas, nursing home costs are typically higher than the average costs.
If you were to spend multiple years in a nursing home, the costs could be staggering.
What is the solution? For many, the solution is Medicaid. This is another government health insurance program, and it will pay for long-term care if you can meet the eligibility requirements.
These requirements are stringent, because Medicaid is a program that is intended for people who have very limited financial resources.
You could potentially pay for long-term care out-of-pocket until you have virtually nothing left. At that point, you could meet the eligibility requirements, and Medicaid would pay for the remainder of your care. However, everything that you intended to leave to your loved ones would be gone.
If you plan ahead intelligently you can prevent this outcome. Medicaid planning often involves a measured divestiture of assets. This is typically called a Medicaid spend down.
You could give gifts to your loved ones to reduce the amount of property that is in your own name. If the plan comes to fruition in the ideal fashion, you would be able to qualify for Medicaid when and if you need long-term care.
This takes careful planning, because there is a 60 month look-back. You have to complete your spend down at least five years prior to applying for coverage, or your application will be denied initially.
When Medicaid is evaluating your eligibility, your home is not considered to be a countable asset at first, but there is an upper equity limit of $543,000 in 2014. If you are applying for Medicaid coverage while your spouse is remaining at home, there would be no equity limit at all.
Under federal guidelines, the states must seek recovery from the estates of people who were receiving Medicaid assistance to pay for long-term care. Technically, your home could be targeted if you pass away while in direct personal possession of the property.
However, there are steps that you can take to divest yourself of direct ownership of the property.
Obtain More In-Depth Information
We have prepared an informative report that can provide you with a great deal of useful information about Medicaid and long-term care. To download your copy of the report, click this link and follow the simple instructions: Indianapolis IN Medicaid Planning.