How Do I Prepare for Long-term Care?

Long-term Care (LTC) broadly refers to medical and social services designed to support the needs of people living with chronic health problems that affect their ability to perform everyday activities. Long-term care services include traditional medical services, social services, and housing. Odds are, the majority of people over the age of 65 will need LTC at some point, but most people don’t plan for it. Sure, people think about and plan for retirement, but rarely are LTC costs factored into such a plan.  If you require nursing home care, in our experience, your costs could be as much as $84,000.00 or more a year. For one person in western Kansas—that can be quite the unexpected expense.
 
What are some ways you can pay for LTC should nursing home care be required?

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Medicare—Medicare is a national health insurance program that provides health insurance for Americans aged 65 and older, younger people with some disability status as determined by the Social Security Administration, as well as a few other categories of people with specific diseases. A common misconception is that Medicare will cover all the health care needs for a person over age 65. That’s true for most standard medical care, but it isn’t true when it comes to LTC coverage.  In Kansas, Medicare will only pay for LTC under limited circumstances: You must have been in the hospital for at least three days prior to the LTC admission; the LTC stay cannot be solely for custodial care; and Medicare will only pay for a maximum of 100 days of LTC. 
 
LTC insurance—Some individuals purchase long-term care insurance policies to cover LTC expenses.  Many people do not have the resources or liquidity available to cover the high premium costs of these policies.  The number of LTC insurers are declining and the policy prices are rising.  Additionally, depending on your age and health condition, a plan may not be available to you.
 
Private pay—Very few among us have the resources to self-insure for such a large expenditure. Additionally, your children and family likely cannot bear such a responsibility, even if they desire to do so.  An annual bill for $84,000.00 will deplete your savings quickly. For most people, private paying is simply not a viable option.
 
Medicaid—Medicaid provides health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, elderly adults and people with disabilities. KanCare is the program through which the State of Kansas administers Medicaid.  In order to qualify for benefits, you must meet their financial requirements (and be in need of LTC care).  If you plan far enough in advance, you can arrange your financial affairs to meet KanCare’s requirement.
 
If you fail to plan ahead and you make asset transfers less than 5 years in advance of your need for Medicaid and LTC, you may be penalized for such transfers and your Medicaid benefits could be delayed. But, if you plan far enough ahead, we can develop a plan that allows you to preserve your family’s legacy and pass on your hard-earned assets to the next generation, without being penalized or delaying your qualification for Medicaid benefits.
 
Planning for retirement is complicated, and has many moving parts. At Davis & McCann, P. A., your estate plan is custom designed with your individual circumstances in mind. Make sure you plan a way to handle your LTC expenses now—your children will thank you.
 
For more information on Long Term Care planning, contact Davis & McCann, P.A., Dodge City, Kansas. We are a premier estate planning law firm that assists clients from nearly every county in western Kansas with estate planning, long term care planning, Medicaid planning, probate and trust administration, business formation, business succession, farm and agricultural business succession planning, real estate and related matters.  ​