The rising cost of nursing homes
Nursing home costs are something everyone, young or old, needs to think about. Many of us will spend our last years in a nursing home, and none of us have any way of knowing how many of those last years we may have. According to an article in the New York Times, a national survey by insurance company Genworth found that the median annual cost of a semiprivate nursing home is more than $80,000, with a private room costing more than $90,000 a year, and is growing at over twice the rate of inflation.
Some people choose to pay for it through long-term care insurance. But according to that same article, only about 20 percent of the public owns long-term care insurance, and only 14 companies are still selling it. And too many people wait until the last minute to purchase it — 45 percent of applicants age 70 or more were denied coverage in 2014.
Making use of Medicaid
One way to cope with the rising cost of a place in a nursing home is through Medicaid. But the state of North Carolina places limits on the income and the monetary value of the resources that anyone applying for Medicaid is allowed to have. Resources for the aged, blind and disabled are limited to $2,000 for an individual or $3,000 for a couple, and monthly income is limited to $981 for an individual and $1,328 for a couple. Cash, retirement accounts, life insurance policies, stocks, bonds and other investments all count as resources. If you have more than these limits, but you are also dealing with high medical bills, it is possible that you are eligible for a Medicaid deductible. An elder law attorney can tell you if you are.
There is a kind of irrevocable trust called a Medicaid Asset Protection Trust. Any assets in it are no longer counted as resources in determining eligibility for Medicaid. But the government will assume that you have sold your assets for fair market value, and will count that value as part of your resources even if you gave your assets away completely. To enforce this, it will look back for five years on what assets you have transferred. You therefore need to plan more than five years ahead.
Elder law attorney in the Gastonia, Gaston and Mecklenburg County areas
If you need advice on planning for nursing home costs, it is best to get this advice from someone who is not trying to sell you a financial product. Elder law attorneys make no money from their own recommendations.
Robert C. Whitt is a Gastonia attorney, servicing the areas of Gastonia, Charlotte, Mount Holly and Gaston, Mecklenburg, Lincoln Counties and surrounding communities. He focuses on wills, trusts and other aspects of elder law. Call and make an appointment today.