A lot of people do not concern themselves with budgeting for potential long-term care costs because they’re under the impression that Medicare will cover these expenses. In reality, Medicare does not pay for an extended stay in a nursing home or assisted living facility. And if you’re thinking that it will be simple to adjust to these expenses should they arise, you may not be aware of the present state of long-term care costs.
Every year the MetLife Mature Market Institute culls a great deal of research data on the subject and publishes it in a report. According to this year’s report, in 2010 the average cost for a year-long stay in an assisted living community in the United States was nearly $40,000.
A year in a private room in a nursing home would run you just over $83,500 on average. According to the United States Department of Health and Human Services men who need long-term care require it for 2.2 years; for women the figure is 3.7 years. Given these statistics, you could be looking at a very significant expense.
Some people respond by doing what it takes to qualify for Medicaid, which does pay for long-term care. You can’t have assets exceeding $1,500 in Indiana, but some things don’t count, such as your home, your car, and some valuables. So there is such a thing as a Medicaid “spend down” strategy. It’s basically self-explanatory: you spend down your assets until you get within the Medicaid resource limit.
However, there is a five year look-back period. If you give away assets in an effort to qualify for Medicaid within five years of applying you are penalized. The penalty is based on the amount of money that you gave away as compared to the average cost of long-term care in the state within which you reside.
If you’re interested in finding out more about Medicaid and how it may fit into your incapacity plan, simply arrange for a consultation with an experienced elder law attorney.
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.
- What You Need to Know About Older Drivers in Indiana - November 30, 2023
- What Is Undue Influence in an Indiana Will Contest? - November 28, 2023
- How to Make Things Easier for Your Children After Your Death - November 23, 2023
