As an elder law firm, we pay close attention to the state of long-term care costs because most seniors will need paid living assistance eventually. Medicare does not pay for the custodial care that in-home caregivers and nursing homes provide, so this is not the financial solution.
Genworth Financial is a company that sells financial products for senior citizens, and they have a vested interest in the state of long-term care costs around the country. As a response, they conduct annual surveys to keep a finger on the pulse of the state of affairs.
Their 2021 research has been released, and the numbers are not very encouraging for people that live in and around New York City.
On the Rise
The median annual cost for a semi-private room in our area was $149,650 in 2021, which is a 5.94 percent increase over the previous year. For a private room, the figure was $158,775, and this is an increase of 2.35 percent.
Some people can get the help that they need from professional caregivers while they are still living in their own homes. The median annual charge for a licensed in-home caregiver in New York City went up over 15 percent to $68,640.
According to the United States Department of Health and Human Services, 19 percent of care recipients get the assistance for 1-to-2 years, and 21 percent are in the 2-to-5-year range. Thirteen percent of elders that receive paid care incur the expenses for more than five years.
When you do the math, you can see that these numbers can add up considerably, and a married couple may be barraged with two different sets of long-term care bills.
What Can You Do?
It is not easy for most people to come up with this kind of money late in their lives, so paying out-of-pocket can obliterate your legacy. Fortunately, there is a solution that can be implemented if you work with an estate planning lawyer in advance.
Medicaid will pay for long-term care, and Community Medicaid will cover in-home care costs if you can gain eligibility. However, there is a $16,800 asset limit because these are need-based programs.
You can transfer assets out of your name in an effort to gain Medicaid eligibility, but you have to act in advance because of the look back periods. You are ineligible for Medicaid for up to five years after you divest yourself of assets, and the look back is 30 months for Community Medicaid.
The fact that you have to act in advance can be problematic if you are relying on income that is being generated by your invested savings. As a response, you can transfer these assets and your home into an irrevocable trust at least five years before you may need long-term care.
You would still be able to receive the income, but you would lose control of the principal. The reason why you should put your home into the trust is to protect it during the Medicaid estate recovery phase.
Medicaid is required to obtain reimbursement from the estates of deceased beneficiaries if there are any assets to attach. If a home is in your direct personal possession at the time of your passing, they could place a lien on the property.
Schedule a Nursing Home Asset Protection Consultation!
As you can see, nursing home costs can be devastating, but you can protect your legacy if you take the right steps in advance. If you are ready to get started, you can schedule a consultation at our Manhattan elder care planning office if you call us at 212-973-0100.
There is also a contact form on this site you can fill out if you would like to send us a message.