Medicaid, Long Term Care & Asset Protection

If you or a loved one is currently receiving care, about to need care or you just want to plan ahead, the following will touch on some facts as well as some misconceptions pertaining to Medicaid, Long Term Care and Asset Protection.

Personal care is expensive, whether at home, in assisted living or in a nursing home. In Massachusetts, nursing homes can cost more than $100,000 a year. Providing the same level of care at home or in assisted living can be even more expensive.

These costs, for the most part, are not covered by Medicare or regular health insurance. They are, on the other hand, covered by long-term care insurance. In Massachusetts a good long term policy will cover care in a facility and at home.  Most people I know wish to stay in their own home as long as possible.  Unfortunately, not enough people plan ahead and if one's health changes, insurance may no longer be an option. That means that they must rely on their savings to cover the cost of care. At these prices, it wouldn't take long for someone to wipe out their savings, leave a healthy spouse or partner destitute or deplete their children's inheritance.

The MassHealth (Medicaid) program pays for nursing home care for those who qualify and in some instances for assisted living and home care. The rules are complicated and ever-changing. The application process can also be daunting. Generally, a single person cannot have more than $2,000 excluding their primary residence. New legislation can also put one's home at risk so please contact me for details.  These laws change often so it's necessary to reevaluate one's situation to make sure the right course of action is taken.

Here are some questions and comments I've heard over the last 19+ years.

   If I need care, I'll just give all my assets to my kids and then apply for Medicaid

Unfortunately, this strategy no longer works.  There are very strict guidelines in place to prevent such actions.  The look back periods (The amount of time the State can look back to see what assets you gave away) has drastically been extended.  It could be literally years until one could qualify for aid.

    My kids will take care of me

At first glance, this seems like a very reasonable statement.  You took care of your kids for a long time so why would it be so much to ask for them to take care of you?  Even if a child is willing it is very difficult in most situations today.  Many times, your children have families of their own and even if they lived close by the burden could be a tremendous strain.  Could they lift you, get you into a bath, dress you etc? This past summer I was mowing my mom’s lawn and she slipped on some wet grass.  At first I thought she may have broken a hip but I was able to get her on her feet and it appeared she just strained her leg and back.  She needed to get into the shower and fortunately was able to undress herself once I got her in there.  Luckily, she was up and around within a week.  My mom has a long term policy if the need was longer.  She could have stayed in her home and someone would have come in to help her bathe, get dressed and prepare her meals.

    I won’t require long term care.  I plan on passing away peacefully in my sleep at age 97

This sounds good to me!  Unfortunately, we just don’t know what life has in store for us.  My grandparents on my dad’s side spent their last years in a nursing home and my grandparents on my mom’s side passed away at home. Family history offers no guarantees.  The fact is that we are living longer and with that the odds are that we may require care at some point is very likely.

Should I purchase a Long Term Care Policy?

It depends.  There are many factors we must look at to see if this makes financial sense.  Generally, if one has assets to protect (a qualified Massachusetts policy also offers some protection regarding one's home), doesn't have any major health issues, wishes to stay in their home if possible and some other factors, they may be a good candidate for insurance.  Bear in mind, that if one is ill or recently diagnosed with certain illnesses, insurance may not be an option.

In that case, some crisis planning would be recommended to save one's assets if possible.  It's always better to plan ahead whenever possible.