If you’re age 65 or older, issues like retirement and long-term care planning are probably more frequent topics of your conversation. Even if you’re not in this population group, chances are you know and care for someone who is. Research from the U. S. Department of Health and Human Services suggests that if you are age 65 or older, you’re most likely going to need long-term care at some point in your life. Unless you are sufficiently wealthy or exceptionally poor, it would seem wise to do some advanced planning to cope with the increasing health care costs that will accompany long-term care stays.
Options you may want to investigate include, but are not limited to:
1. Long-term Care Insurance. The older you are and the longer you wait to obtain insurance, the more expensive it will become. Costs for long-term care insurance (LTCI) tend to be expensive and premiums will most likely rise over your lifetime. With average premiums running at $2,700 a year (per industry research firm, LifePlans), seniors may find LTCI too cost prohibitive to be a realistic option. Additionally, your age or current health condition may disqualify you from obtaining this type of insurance.
2. Life Insurance. Some insurance companies offer life insurance with long-term care riders. With this type of policy, your beneficiaries may still receive a death benefit even if you use long-term care rider benefits. With traditional LTCI, there is no death benefit paid to your beneficiaries after your death.
3. Family Members. Your immediate or extended family members may be able and willing to care for you or pay for your health care costs. With annual semi-private nursing home room costs running on average at $90,000 annually, according to a 2019 Genworth study, few families can afford to cover these costs for a year, let alone for multiple years.
4. Medicare. Kansas Medicare program (KanCare) does NOT cover long-term care expenses for patients requiring full nursing home care, except for very limited circumstances.
5. Medicaid. If your assets are at or near poverty level, you may qualify for government assistance, which will be used to pay for your nursing home care. You can consult your local Area Agency on Aging to discuss the income and asset qualifications to see if this is a viable option for you. Please note, gifting of any assets in order to qualify for Medicaid assistance, must be reported on your Medicaid application. Failure to do so may result in disqualification for benefits or additional legal repercussions.
6. Long-term care planning. An elder law attorney will design a customized estate plan for you that may include a Medicaid Asset Protection Trust (MAPT). This type of Irrevocable Trust is a complex estate planning technique anticipating the future need for long-term care. It is designed to help an individual qualify for Medicaid, who might not otherwise be eligible. Your long-term care plan may involve making gifts of assets, paying full rate for nursing home expenses for a specific period of time, purchasing an Annuity, or other techniques. Your plan will depend on your assets, marital status and eligibility, according to the rules set out by KanCare, the entity that administers Medicaid in Kansas.
Other estate planning techniques may be recommended dependent upon your unique circumstance. The most successful estate plans share a common factor: advanced planning. Please consult a qualified elder law estate planning attorney to discuss your options.
For more information on Medicaid and long-term care planning, contact Davis & McCann, P. A., Dodge City, KS. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.
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