Estate Planning Isn’t Just For The Elderly

Happy, smiling couple in their sixties.

How can families help older adults pay for nursing home costs?

On Behalf of | Feb 21, 2019 | Long-Term Care

While the accommodations available to your aging loved one in a nursing home may seem basic, they will likely cost a significant amount of money. Depending on the location of the facility, the size of the room and the medical needs of your loved one, you could pay well over $1,000 each week for nursing home care.

The national average is currently about $225 per day for a shared room and $253 per day for a private room in a nursing home. An assisted living facility, which will offer less support, averages about $119 a day, but won’t be an option for those needing intensive daily support. Even if your loved one has a sizable nest-egg, those costs could quickly leave your family with a big financial headache.

You obviously want your aging loved one to get the best care possible, but your family shouldn’t have to liquidate all of its assets in order to cover the costs of long-term care. The good news is that there may be options available to your family, depending on how pressing the need for long-term care is at the moment.

Qualifying for Medicaid is an important first step

Unless your family has significant assets, covering the cost of nursing home care can exceed your monthly income. Unfortunately, most private insurance companies and Medicare will not directly cover the cost of nursing home rent or skilled nursing staff providing support in home for your loved one.

The only state insurance program that will cover those expenses is Medicaid. Unlike Medicare, which is available to anyone over a certain age, Medicaid has strict limitations on income and assets for coverage. Your loved one may not qualify right away or may have to deal with a penalty due to the assets they already have.

If you have a few years to plan, there are many options available

The ideal circumstances for planning for long-term care begin at least five years before someone needs residential support. That is because Medicaid has a five-year look-back policy. In other words, any asset transfers, whether they go into a trust or to family members, that occur within five years of a Medicaid application could result in a financial penalty for your loved one.

Those financial transactions could preclude your family member from accessing Medicaid insurance until they have paid the same amount of money out-of-pocket. Provided that you have at least five years between planning and when your loved one requires Medicaid benefits, you can avoid those potential penalties.

If your needs are more pressing, you should speak with an experienced attorney who understands long-term care planning as soon as possible. The longer you wait, the fewer options you may have available.