Nursing homes cost a lot
Anyone turning 65 years old now stands a roughly 70 percent chance of needing some sort of long-term care services before they die. On average, men will need these services for 2.2 years, whereas women will need them for 3.7. In the case of nursing homes, there is a 35 percent chance that someone turning 65 years old will need to spend time in a nursing facility.
And nursing home costs are a major expense. According to an article in the New York Times, the median annual cost of a place in a semiprivate nursing home is more than $80,000, with a private room costing more than $90,000 a year. Worse, this cost is growing at over twice the rate of inflation, and, according to a 2015 report for the National Bureau of Economic Research, is the primary driver of the cost of medical care for Americans in their nineties.
Paying for a place in a nursing home
Some people use long-term care insurance to pay nursing home costs. But this is also an expensive solution, with some policies costing more than $7,000 a year. Only about 20 percent of the public owns long-term care insurance, and only 14 companies are still selling it. And too many wait until the last minute to buy it. In 2014, 45 percent of applicants age 70 or more were denied coverage.
The solution for most people is to take advantage of Medicaid. But all Medicaid programs come with certain restrictions on income and resources. There is a limit of $1,247.50 for basic care and $1,560.50 for a dementia-lockdown unit. The good news is that this includes Social Security, fixed pensions and other forms of fixed income, but does not include interest, dividends or payments out of an IRA or 401K.
Elder law attorney in Gastonia
Many people who appear to be offering online advice on how to plan for nursing home costs are in fact trying to sell you some sort of financial product. It is a better idea to get advice from an elder law attorney, who does not make any money from his or her own recommendations. For example, if one member of a couple goes into a nursing home, they will be able to keep a minimum monthly maintenance allowance of at least $1,991.25 a month of their combined incomes. Under the right circumstances, they may be able to keep more. An elder law attorney can show you how.
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.