As the country’s population has continued to age, and more and more seniors enter long-term care facilities with serious medical conditions, the cost of nursing home care has risen to heights unimaginable just a few short decades ago. Worse, those costs are projected to continue to rise every year for the foreseeable future. If you’re concerned that you might one day require long-term care, and are wondering how you’ll ever manage to cover costs that can rise to as much as $10,000 a month or more, then it’s only natural that you’d be worried about Indiana nursing home costs. Fortunately, there is something that you can do to prepare for that expense.
First, it’s important to understand that these costs are unlikely to go down in the future, barring some technological innovation or scientific miracle. Even at today’s rates, the average cost per hour for care is only around $10 per hour – far less than what a registered nurse makes. From that perspective, costs can certainly be justified, especially when you consider that labor expenses are a major component in today’s nursing home prices. Add in expenses related to medicine, technology, and basic utilities, and it’s a wonder that care doesn’t cost many times its current rate.
None of that is comforting to seniors struggling to pay for that care, of course, but it does help to put things in perspective. It should also give us pause as we consider the face that there is almost no chance for reduced costs in the future. That leaves us with only one real option: planning to ensure that we can cover those costs when we reach our golden years. For most people, that means making plans today to be ready for Medicaid eligibility when some future tomorrow rolls around.
Why Medicaid?
If you’re wondering why Medicaid is mentioned as an option for your future nursing home care, rest assured that there’s a very good reason for the suggestion. While it might make sense to assume that Medicare would be available to help with your long-term care costs, that program provides only minimal, short-term coverage. The Medicaid program, on the other hand, is designed to help with those costs if you can meet the program’s stringent asset and income requirements.
There are other possible payment options, of course. You could try to save up enough money to ensure that you have the resources necessary to cover those costs on your own. Just hope that you don’t end up needing several years of care at a nursing home, since that could cost you hundreds of thousands of dollars. That’s one way to rapidly deplete your retirement nest egg!
Another option involves the use of long-term care insurance. Yes, there is insurance that can help to defray the costs of nursing home care should you find yourself needing long-term care in the future. There are drawbacks, though. The main drawback is that the premium costs are often far too great for many people to endure. That makes this insurance tough for most people to maintain over any length of time. It also doesn’t cover all the costs of care; it just pays a portion of those costs. So, you could still end up owing thousands each month.
Sadly, none of those options can compare to the Medicaid program’s benefits, which often cover the entire costs for residents’ monthly expenses. If you can qualify, you could enjoy the benefit of having that program meet all your outstanding nursing home costs. With the right planning, you could even enjoy that coverage while some portion of your nest egg remains secure and available to care for your dependents or get passed on to your heirs.
Medicaid Planning
Medicaid planning is the key to getting rid of those nursing home concerns. When you start early, you can develop a strategy that organizes your assets and finances in a way that ensures Medicaid eligibility when you reach the point that you need nursing home care. To accomplish those goals, you need to start as early as possible, and use strategies like gifting and irrevocable trusts to remove assets from your estate so that the Medicaid program doesn’t count them as wealth when it calculates your eligibility.
Note that this needs to be done early to avoid the Medicaid five-year look-back penalties that can arise when transfers of assets are made within the five-year period right before you apply for benefits. That’s the result of Congressional action a decade ago designed to prevent seniors from sheltering their wealth from nursing home costs. At the time, experts were concerned that too many people would simply give away their wealth when they needed nursing home care, so that they could keep their assets and still get help from the government.
The good news is that you can plan for Medicaid without sacrificing your ability to also protect assets and provide a legacy for those you leave behind. While there are certainly no guarantees that you’ll be able to secure all your wealth, the right strategy can help you to protect a sizable portion of it from those rising nursing home expenses. Best of all, these techniques and tools can help you to avoid the type of emergency Medicaid situation that could see you forced to make rash decisions that consume your estate.
Get Professional Help
There are, however, risks for those who try to plan for Medicaid eligibility on their own. Without adequate legal assistance, you could end up making mistakes that leave you vulnerable to ineligibility penalties that last months or years. You could even end up destitute, with nothing left to care for your loved ones and no inheritance to leave behind when you pass away. At Frank & Kraft, Attorneys at Law, our elder law experts can help you to craft a Medicaid plan that works with your estate plan to provide your assets with the protection they need to guard against long-term care expenses. To find out how we can assist you in ending your worries about Indiana nursing home costs, call today at (317) 684-1100, or contact us at our website.
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.
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