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Long-Term Care Options, Benefits And Mistakes To Avoid

On Behalf of | May 11, 2022 | Elder Law

The cost of long-term care can take away a lifetime’s worth of work and saving. Don’t make mistakes that can cost you everything. Start by understanding the basics and the strategic alternatives open to you.

Paying for Long-Term Care: There are only three ways to pay for long-term care: private long-term care insurance (which few people have); government benefit programs like VA benefits or Medicaid; or pay for it yourself.

Levels of Care: At first a long-term care patient might still be at home, getting care from private caregivers, family or others (where care might even still be free).

Second, a long-term care patient might need to go to an Assisted Living Facility or Personal Care Home, to get assistance with activities of daily living due to physical or cognitive limitations.

Third, a long-term care patient might need a Nursing Home, either because of acute illness, or advanced inability for self-care. Nursing home care of course costs the most, so strategic planning when nursing home care is needed – often to get long term care Medicaid – saves the most.

A fourth option is when Medicaid pays for nursing services in people’s homes. However, it’s often difficult to get sufficient hours of care from home-based Medicaid services, and it can be much harder to protect assets and still qualify.

Medicare vs. Medicaid: It is also important to distinguish between Medicare and Medicaid. Medicare pays for doctors, hospitals and prescription drugs, if you are entitled to it because you worked and paid into the system, without regard to your finances. However, Medicare does not pay for long-term care, only for short-term care in a nursing home following a hospital stay.

Medicaid is not an entitlement program.  You have to apply, be approved and found eligible based on both disability – medical need – and financial need. Long term care Medicaid is intended for people who need certain care, but don’t have money to pay for it.  Note: Medicaid does NOT pay for assisted living in Pennsylvania.

But don’t give up hope. There’s a lot that an elder law lawyer can do for you to help you get the care you need while still saving lots of your money. It’s never too late to try. I regularly help patients and families in emergency cases on the doorstep of the nursing home, or even after admission. You DON’T need to have acted five years in advance. Don’t make the mistake of not trying or finding out what you can do.

Applying for Medicaid is a complex, bureaucratic, paperwork intensive exercise into foreign territory. Adding an expert guide can make all the difference.

Medicaid’s rules are set up to force you to spend down almost all of your own money on your own care first, before they start to pay anything for you. You do get to keep and protect certain amounts of exempt, protected, “non-countable” resources, in different amounts for different categories of assets.

Gifting: If you make any significant gift during the so-called “five year look back period” prior to applying, it will interfere with and delay your eligibility. That doesn’t mean that we don’t use gifts and gifting in our strategies. We do, frequently, but in planned, thoughtful, strategic ways. Also, some kinds of gift transfers are exempt from the rules against gifts.

Married vs. Single: When a single, unmarried person is entering nursing care, I can typically help them save about half of whatever is left at that time –   which is better than losing it all!

The rules get more complex for married couples, but also offer more opportunity for strategic planning for asset protection. Medicaid counts all the assets belonging to either spouse as potentially available to the Medicaid applicant/ nursing home spouse. Just putting assets in one name or the other is not sufficient protection. (Income is counted separately, though. The community spouse” staying at home in the community gets to keep his or her income, often creating profitable planning options.)

When one spouse of a married couple is going into the nursing home and the other is staying at home, I can usually still help them save almost everything that they have, except for just the cost of implementing the plan!

VA Benefits: VA benefits can also be available for qualifying veterans and their spouses and can especially help to pay for home care and assisted living. The resource limits are much more generous than Medicaid’s, though the benefits are more modest.

At Marks Elder Law, we help people every day with issues like these. I invite your questions and feedback. Please let me know how I can help you and your family.