Elder law attorneys assist clients that are concerned about the eventualities of aging. There are between 10,000 and 15,000 applications for Social Security being accepted every day because of the aging of the baby boomers, so our services are in great demand.
The most pressing issue that we are dealing with at the present time is the matter of long-term care and the costs that go along with it, and we will share some inconvenient truths in this post.
You may find some activities to be a bit more difficult as you get older, but it can still be hard to envision a time when you will not be able to handle your basic day-to-day needs. This is understandable, but if you digest aging statistics, you may be able to adopt a different perspective.
There is a tool on the Social Security Administration website that you can use to determine your life expectancy in light of your age. If you plug in the numbers for a man that is turning 67 today, you will see that his life expectancy is 85 years, and it is 87 years for a woman.
When you stop and consider what life may be like as an octogenarian, you can see that some type of long-term care may be in your future.
A lot of people have to reside in nursing homes because of the impact of Alzheimer’s disease. The Alzheimer’s Association tells us that 32 percent of elders that are over the age of 85 have contracted the disease.
When you combine the aging statistics with this fact of life, a compelling picture emerges.
According to the United States Department of Health and Human Services, seven out of every 10 seniors will need living assistance, and 35 percent of them will reside in nursing homes.
The vast majority of seniors will qualify for Medicare as a source of health insurance. It is important to budget for the out-of-pocket expenses, because there are co-payments, premiums, and deductibles for services that are covered.
These expenses can usually be managed, but there is one enormous hole in the coverage that is not easy to overcome. This program will not pay for long-term custodial care, so you have to look elsewhere for financial support.
Long-Term Care Costs
It is not easy to pay for long-term care out of your own pocket. Genworth Financial has been conducting annual surveys that probe into the costs around the country, and their 2020 figures have been compiled.
Here in Manhattan, the median annual charge for a private room in a nursing home was $155,125 last year, and the figure was $141,255 for a semi-private room. For an in-home health aide, you are looking at a median annual cost of $59,488.
Medicaid and Medicaid Home Care
There is a solution in the form of Medicaid eligibility. This government health insurance program will pay for long-term care, but there is a low $15,900 asset limit in New York.
Some things do not count, including your home, but Medicaid could put a lien on the home after your death if you are in direct personal possession of it when you pass away.
In addition to full-blown Medicaid coverage to pay for assistance in a residential setting, there is a Community Medicaid program that covers in-home care. To develop a financial profile that will lead to eligibility, you could convey assets into an income-only Medicaid trust.
As the name would indicate, you could continue to receive income from the trust’s earnings, but you would not have access to the principal. If you fund the trust at least five years before you apply for Medicaid, the assets would not count.
There has been no look-back period for Community Medicaid, but a 2.5 year look-back has been established. It was scheduled to go into effect on April 1, but the implementation date will be pushed back at least to July 1, 2021.
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We are here to help if you are ready to work with a Manhattan, New York estate planning attorney to put a plan in place. You can send us a message to request a consultation appointment, and we can be reached by phone at 212-973-0100.