Financial planning for older Americans can be a challenge. Many think that they will rely on programs like Medicare or Medicaid to help them cover costly medical care needs as they age. What these individuals don't realize is that there are strict limitations to what these programs do cover.
Learning about the ways that you can shore up your finances and prepare for your needs as you age doesn't have to be a challenge. You can take small steps to make changes that will benefit you in the future.
Nursing home care is costly
One of the primary expenses that elderly individuals have to think about is the cost of long-term care, which includes living in a nursing home. Medicare Part A can help with hospital stays, but there are specific requirements for the coverage to extend to nursing homes. Even then, it is limited coverage.
In order for Medicare to cover a stay in a nursing home, the person must first have at least a 3-day hospital stay. The admission into the nursing facility must occur within 30 days of that stay. There is a limit of 100 days in the hospital, and only the first 20 days are likely fully covered. After that, there is a copay for days 21 to 100. This is currently $170.50 per day, which is a hefty sum for an elderly person.
Medicare will likely not cover your stay if your status is "observation" or "custodial" instead of "skilled." It is important to know what admission status you have when you go into the facility. It is possible to challenge the admission status if you find out that it isn't correct.
Preparing for Medicaid coverage can't happen at the time that you need to apply for the benefit. There is a 5-year lookback period that applies to these cases. If you have sold or given away any property in the past five years, you can face negative consequences for your actions.
Your long-term financial planning for your elder years must be instituted early. This can be handled in a variety of ways. For example, irrevocable trusts might be beneficial. It is best to consult with someone familiar with these matters to find out what course of action is appropriate for your needs.