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Long-term care can include any service that helps people who have a prolonged illness. The illness can be a physical disability or a cognitive impairment such as Alzheimer’s disease or Dementia.  The services may include help with activities of daily living, home health care, adult day care, hospice care, nursing home care, or care in an assisted living facility.  The level of assistance required can include physical therapy, administration of medication, and help with daily activities such as bathing, eating, and dressing.

Contrary to what many people believe, Medicare coverage will not pay for most of the long-term care they will need if they suffer from a long-term illness. According to the U.S. Department of Health and Human Services, the average costs in the U.S. (in 2009) are:

  • $198/day for a semi-private room in a nursing home
  • $219/day for a private room in a nursing home
  • $3,131/month for care in an Assisted Living Facility (for a one-bedroom unit)

It’s easy to fall into the trap of thinking that because you are healthy now, you don’t need to worry about long-term care, but consider this:

  • Life expectancy after age 65 has now increased to 17.9 years, up from 1940 when life expectancy after 65 was only 13 extra years.  The longer people live, the greater the chance they will need assistance due to chronic conditions.
  • 44% of people reaching age 65 are expected to enter a nursing home at least once in their lifetime and 53% of them will stay for one year or longer.

The costs of long term care can be financially devastating to families.  So how do most people afford such long-term care?  Through a combination of long term care insurance, paying out of pocket, and Medicaid.

While Medicaid law can be complex, it’s important to understand this:  Medicaid is there to help families like yours, and Medicaid planning is a great way to insure that if needed, you can qualify as quickly as possible, to protect your family from the financial strain of nursing home care.

Here are a few important things to remember:

  • It’s never too late to plan. Many have heard that you must plan three or five years ahead of time.  This is untrue.  Medicaid planning can begin at any time, even if your loved one is already living in a nursing home facility.  However, the sooner you plan, the more options you’ll have available to you.
  • You can keep your home.  A common myth is that Medicaid will take your home.  The Medicaid laws provide certain exemptions for your home, but proper planning is the key to using the exemptions properly to preserve the home.
  • You don’t have to give your assets away to protect them from nursing home costs.  There are other planning measures available.  While it varies from person to person and family to family, often anywhere between 40% and 100% of the assets can be preserved for use by a healthy spouse or other family members.
  • Be careful about when you apply for benefits.  Applying too early can mean a longer wait for Medicaid qualification than necessary, while applying too late can mean having to pay out of pocket for care that you may not have had to.

The best advice is this: Start planning now. No one knows what the future will bring.  The sooner you start preparing for your golden years, the fewer surprises there are likely to be.  A little planning now can make a big difference for you and your loved ones later on.

Want to discuss your long-term care planning options?  Call our office a call at (919)443-3035 to discuss next steps or to register for one of our upcoming seminars.

Jackie Bedard
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Attorney, Author, and Founder of Carolina Family Estate Planning
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