If you have to move into a nursing home or another type of assisted living facility, who will pay the high costs for care? Will you be able to keep any of your money to leave to your family? Or will the government take everything you have?
These questions and many others are often asked by clients who are concerned about their future. The average cost of nursing home care is approximately $6,300 per month. That means even if you have assets, you might be spending through them very quickly — especially if you end up staying in the facility much longer than expected — so proper planning is crucial.
Why Protect Your Assets
In North Carolina, generally speaking Medicaid will pay for nursing home care if you “spend down” your assets so that your “countable assets” do not exceed a house, car and $2,000 in the bank. Once you have met the threshold test, Medicaid will pay the difference between your income and the facility rate for care.
At Kelly & West, we work with clients to design a plan to protect your assets. By making your “countable assets” “non-countable assets” we can work to make sure what you own is not counted by Medicaid and that you qualify for government assistance. For example, you may be allowed to have up to $40,000 in government bonds and these bonds be considered “non-countable assets” or you can use your money to prepay for your funeral arrangements, as long as you have a plan that complies with Medicaid’s rules and regulations.
Who Will Qualify?
Not everyone will be able to qualify for Medicaid. People with IRAs, stocks, bonds, and other money might not be able to spend down or move it all to a non-countable form in order to qualify.
Also, some people might qualify, but might not want to do this. Many people prefer not to rely on the government for their care, especially since they may receive better care by privately paying for it.
Those who have paid for long-term health care insurance also may not want to obtain government assistance. If insurance is covering the cost of your care, this may leave your assets intact and available to pass to your family. But be careful, not all long-term care insurance contracts provide enough to cover the costs of care. Or, if you have a “traditional” long-term care policy, this could just mean that you are only saving the government money as this would just be considered income to you and may not help you as much as you think.
Make a Plan Now
A lot of people thinking about a nursing home are in their mid-60s and are likely still too young to want that type of care just yet. However, buying long-term care insurance at that age means paying a much higher premium. That’s why many people come to us and discuss these options early. We can develop a plan of action now for when the time comes later. We are happy to talk to you to discuss your options as this can be a great relief to you and you can end up saving your family quite a bit of money, time and headache in the future if you have a plan in place.
