long-term care: don't be caught unprepared!

As the United States’ population ages, the issue of how to pay for long term care for our seniors is a crisis for many individuals and families. Long term care is incredibly expensive, so for many, Medicaid funding may provide the only option. While everyone over the age of 65 has Medicare, Medicare does not cover long term care costs. Most private medical insurance will not cover long term care costs either. In New Hampshire, the average cost of care at a nursing home facility is over $10,000 per year for a semi-private room. Few have the resources to bear that expense on a continuing basis. This is where Medicaid comes in. Medicaid is primarily funded by the federal government and is designed to help those with limited resources. Medicaid uses income and asset limits when determining eligibility. In New Hampshire, that could mean, for example, that the individual seeking to qualify cannot have more than $2,500 in assets. While some assets are excluded from that calculation, most of us will have obtained more than that by the time we need long term care. If you fail to plan ahead, your application for Medicaid assistance will be denied. You will them be compelled to “spend down” your assets to the limit before your application will be approved. The end result, if you fail to plan ahead can cause the loss of most of what you have worked so hard to obtain. Simply transferring your assets to other family members doesn’t work either. Medicaid uses a five year “look-back” period at any transfer of assets at less than fair market value for measuring the value of your assets. Any such transfer could force to wait for a certain period of time before Medicaid coverage will start. For all these reasons, consulting with an attorney to help you plan how to become eligible for Medicaid is important.