Long Term Care, What Does it Look Like for You?
What Does Long Term Care Look Like
The Baby Boomers are coming! The Baby Boomers are coming! We have seen it coming for years. In fact, 10,000 Baby Boomers turn 65 every day. With modern health care, most of them are expected to live well into their eighties. This also means that many of those seniors will eventually need long term care in some form.
“Long Term Care” is an umbrella term for a number of levels of care that help seniors manage their daily lives. This can be personal care: bathing, dressing, meal preparation, etc… to assistance with shopping, cleaning, paying bills, and laundry. Long term care can be provided in the home, or in a long term care facility such as an assisted living community or skilled nursing facility.
A frequent question that comes up in my practice is how my clients can protect their financial nest egg from the cost of long term care. Clients have heard horror stories about the “system.” They are not sure how much Medicare will pay for a nursing home. They have heard about ways to protect assets, but they’ve also heard that those options may not work in Idaho.
There are several traits of human nature that are at play in these situations. First, usually everyone wants to live long and be healthy, often not acknowledging the need for long term care. Second, most of my clients want to leave a legacy behind when they pass away, either financial or otherwise.
Clashing with our human nature are the economic realities that health care and long term care are expensive, and that seniors sometimes have limited financial resources to pay for the cost of the care that is needed.
For most seniors in Idaho, there are four possible ways to pay for nursing homes, assisted living, and in-home care:
For those that can, long term care can be paid out of the patient’s income and/ or assets (financial accounts, investments, sale of property, etc.).
Most seniors receive Medicare from the federal government, which pays for some short term skilled nursing care under certain circumstances. Other insurance options include supplemental insurance, Medicare Advantage plans, hospice, and long term care insurance. Long term care insurance (LTC or LTCI) is an insurance product that helps provide for the cost of long term care. The problem is, waiting until the last minute to buy a policy can mean exorbitantly high premiums, or inability to qualify for coverage at all. According to the American Association for Long Term Care Insurance, it is recommended to apply for long term care insurance at the age of 50 to lock in discounts for good health and to qualify for lower rates.
Veteran’s Administration programs
If a veteran or the spouse of a veteran is in need of long term care, there are programs that can help offset the cost. The Aid & Attendance Program provides assistance to wartime veterans (or surviving spouses) who were honorably discharged and meet certain financial criteria. If a Veteran was injured in the service, he or she may be entitled to a service-connected pension. Your local Veterans Service Office can be of assistance in applying for these programs.
Medicaid from the State of Idaho
Medicaid is a state-sponsored program that assists seniors and the disabled with care costs that exceed their ability to pay for the care. Medicaid has very strict rules regarding the income of the participant, the assets that the participant can own, and gifting of assets prior to applying for Medicaid.
Statistically, Medicaid from the State of Idaho pays part of the bill for more than half of the people living in nursing homes. Those people have generally exhausted the first three options. Beginning the process of looking at long term care options is certainly daunting. It can be overwhelming and emotional. However, when seniors plan ahead and are knowledgeable about the costs of care ahead of time, there may be a way to preserve some portion of the nest egg. The answer varies from case to case and from year to year (because of changing laws and court cases).
Long term care remains the largest threat to the finances of senior citizens. The best anyone can do is learn about their specific options in order to make an informed choice, rather than waiting and making potentially costly mistakes. Our experience at Coyle & Wytychak Elder Law is to be proactive rather than reactive, so that you have more options moving forward, and can make informed decisions.
by Katherine M. Coyle, CELA*, Coyle & Wytychak Elder Law
Katherine (Kate) Monroe Coyle is a Certified Elder Law Attorney (CELA) at Coyle & Wytychak Elder Law. She has been practicing Elder Law in North Idaho since 2008 and a graduate of the University of Montana and Gonzaga University School of Law. Kate is one of 5 CELA certifications in the State of Idaho. She is active on the Kootenai Health Ethics Advisory Committee, serves as counsel for the Kootenai County Board of Community Guardians, and is a member of the local CareNet chapter, and the National Academy of Elder Law Attorneys. Kate is an active educational speaker for the Alzheimer’s Association and is on the Coeur d’ Alene Estate Planning Council.
* Certified as an Elder Law Attorney by the National Elder Law Foundation