Consider your options for long-term care planning

by | Sep 22, 2017 | Firm News |

Most people in East Hanover enter their retirement years expecting to finally have time to engage in a favorite hobby, travel the world or spend more time with family. However, age will eventually catch up with everyone, and a person may reach a point in their lives where they are no longer physically or mentally able to take care of their daily needs. When this happens, they may need long-term care. However, many long-term care options are quite costly.

For example, on average, a private room in a nursing home goes for more than $75,000 annually, and a person will, on average, need nursing home care for nearly 2.5 years. Medicare usually doesn’t cover long-term “custodial care.” After 100 days of custodial care have passed, the Medicare recipient is on the hook for all costs. Therefore, it is worthwhile to explore other long-term care options.

Private long-term care insurance was once popular. However, over the past few years, premiums on such policies have risen dramatically, making this option difficult for many people to afford. Also, if a person is disabled, they may be ineligible for such policies.

Some people might save and invest over the years or take out a home equity loan in order to pay the costs of nursing home care out of pocket. However, it doesn’t take long to exhaust such avenues, meaning a person could end up still needing care but being unable to afford it.

Finally, there is Medicaid, which is a public insurance program. It can cover long-term care costs, but there are strict limits to what a person’s income and assets can be in order to qualify for Medicaid. These requirements vary between states, but, usually, a person cannot own more than a house, personal effects, a vehicle and around $2,000 or less in savings. People should also be aware that if they try to give away their property so that they can meet Medicaid’s eligibility requirements, the state will consider the person’s past five years-worth of financial records and may find that such gifts are improper.

The laws surrounding Medicaid eligibility can be complex. Those who are interested in Medicaid but are afraid they may have too many assets to qualify may want to speak to an elder law attorney, who can provide more information about the Medicaid program and the various types of trusts that might help.

Source:, “Medicare and You: Few people plan for the cost of long-term care,” Bob Moos, September 16, 2017