Elder Law/Medicaid Planning
Americans are growing older.
Are you or someone you care about 65 or older? If yes, then you are in good company. According to the U.S. Census Bureau, Americans 85 and older are the fastest growing demographic group and, right behind them, 79 million baby boomers are moving into retirement age themselves.
However, with advances in age come advances in health problems. Along with health challenges, there are special legal challenges that need addressing. The body of law addressing these challenges is commonly known as "Elder Law" today.
Generally speaking, Elder Law can be defined as an area of law, covering estate planning, wills, trusts, arrangements for care, social security and retirement benefits, protection against elder abuse (physical, emotional and financial). As the population's longevity moves upward, it has become an increasingly important field of law.
Many of these Americans are concerned with two fundamental threats to their dignity: (1) becoming incapacitated, and thereby losing control to the court system over their personal, health care and financial decisions; and (2) running out of money due to the catastrophic costs of long-term care. Fortunately, these threats may be minimized, or even avoided, through properly coordinated legal and financial planning.
Planning for Incapacity
The older we get, the greater the odds of becoming incapacitated due to an injury or illness. Whether incapacity strikes suddenly or over time, the consequence is the same. You will either have a properly appointed decision-makers of your own choosing through advance legal planning, or a judge will appoint someone for you under the ongoing supervision of the court. The pre-planning alternative is less expensive, easier on your loved ones and protects your privacy from the public record.
Long-Term Care Planning
According to commonly cited statistics, if you are age 65 and single, then the odds are about 50 percent that you will need long-term care at some point. For married couples, odds are about 75 percent that one spouse will need such care. The average stay in a nursing home runs about two and a half years. Nationally speaking, a year in a nursing home is estimated to cost an average of slightly more than $97,455 (National Average 2017, Private Room). It’s no wonder why 50 percent of married couples with one spouse in long-term care are impoverished within one year of admission. For singles, that percentage jumps to 70 percent.
Long-Term Care Insurance
If you are in good health and can pay the premiums, long-term care insurance is another option to pay for your care. In addition, long-term care insurance is sometimes used in conjunction with Medicaid to pay for care during any period of potential ineligibility.
Paying for Long-Term Care
Many people believe that they do not need to worry about long-term care because they have Medicare. However, Medicare only pays for acute nursing home care, not chronic care. Acute care covers rehabilitation and other short-term matters where you will be going home to care for your own daily needs. Chronic care covers matters where you may need help with “activities of daily living” like bathing, eating, dressing, continence, toileting or transferring, not to mention dementia or Alzheimer’s. Medicare will only cover up to 100 days with strict eligibility requirements and full payments limited to the first 20 days and co-payments thereafter. In addition, your Medigap (i.e., Medicare Supplement) policy will not pay for your long-term care, but may pay the Medicare co-payments for days 21 through 100.
Medicaid is oftentimes confused with Medicare.
Medicare is solely a federal program. In contrast, Medicaid is a joint state-federal program. Each state runs its own Medicaid system that must adhere to federal guidelines in order to receive federal funds. Half of the money for the state’s Medicaid program comes from the Federal government and the state pays the rest. To qualify for Medicaid coverage, you must satisfy strict income and asset guidelines.
