Using Divestment Strategies to Secure Long-Term Care
Will Medicare cover the costs of a nursing home stay?
The government-run health insurance program known as Medicare is accessible by millions of Americans upon reaching age 65 – covering a wide range of services from general wellness visits to invasive surgery. However, one glaring issue with Medicare coverage is its virtual ignorance of long-term care needs for seniors who are simply no longer able to live on their own. More specifically, long-term care coverage is generally available to a Medicare enrollee only up to 120 days – and is usually reserved for rehabilitative-type treatments or post-operative recovery requiring skilled nursing.
So, for the average American with a moderate nest egg saved, how is one to afford the skyrocketing costs of nursing home care – which average anywhere from $7,000-$12,000 per month depending on the jurisdiction? Further, if a husband and wife require care together, this sum could be potentially doubled – depleting assets at a record pace.
In short, Americans are either required to deplete their entire life savings on the costs of long-term care, or with a little pre-planning can arrange for careful and tactful divestment strategies to help them to eventually qualify for Medicaid – another government health insurance option based primarily on financial need.
Divestment strategies and Medicaid
Medicaid regulations are comprised of a myriad of guidelines, income thresholds, and property allowances to guide applicants as they begin the application process. For married applicants, the excluded income and assets are somewhat higher than those assessed against single applicants. However, in either scenario, applicants must demonstrate a lack of significant assets in order to qualify.
Herein lies the need for an experienced elder law attorney to help plan proper and lawful divestment strategies in order to preserve assets for future generations while simultaneously ensuring long-term care eligibility when the time comes. One way to do this is to begin transferring assets to family members now, in hopes that the need for Medicaid eligibility will not occur during the five-year lookback period – which could trigger a penalty. There are also other ways to spend down your assets such as pre-paying for funeral and burial costs. Other options include the use of irrevocable trusts, which should be handled with the care and consideration of a knowledgeable attorney.