Alan D. Feller, Esq.
How To Pay For Long Term Care
Elder care attorneys use the word “planning” as an answer to pretty much every question. Planning protects your assets. Planning avoids Probate. It is an empowering word. If you plan, you retain control. Think about a vacation plan. You choose your destination, your flights, your accommodations, your itinerary and your length of stay. Even if certain limitations exist, like cost or not knowing if Mickey Mouse will still be offering theme park hugs due to COVID this summer, the level of control is still high.
Paying for Long Term Care requires planning. There are three major options. Long-Term Care Insurance, Medicaid, and Private pay. For disciplined planners, a Long-Term Care Insurance policy is purchased many years before an aging related illness is anticipated. Several important policy terms must be understood. The Daily Maximum rate refers to the dollar amount limit the policy pays out per day for the cost of covered long-term care. The difference between the actual daily cost (which is usually higher) and the insurance covered cost still has to be paid. The Lifetime Maximum rate is the dollar amount limit available for all accrued long term care costs. Many policies have inflation adjustments built in. Long-Term Care Insurance policies have “Elimination Periods” that are sometimes 60 or 90 days meaning that the policy will not kick in until the insured is receiving qualifying long-term care for the stated period of time. That gap would also have to be paid.
Medicaid planning is often timed to the 5 year nursing home lookback period. Transferring assets to non-spouses or preparing Medicaid Income Only Irrevocable Trusts are useful strategies to protect resources in the event an individual needs institutional level care years down the road and is unmarried. Once an applicant qualifies financially, Medicaid pays a nursing home the difference between the applicant’s income and the Medicaid nursing home rate (which is usually lower than the private pay rate). The applicant’s income is paid to the nursing home with a $50 or $90 set aside to cover incidentals.
Medicaid Home Care or Assisted Living Program Congregate Level 3 planning is timed more closely to an illness, disability or more general aging related slowing down. For ALP Level 3, a qualified applicant’s stay in the assisted living facility is paid by Medicaid after the first $1,535 of the applicant’s income is paid towards their stay. Home care Medicaid payments are based on the assessed number of hours approved for a qualified applicant. The more approved hours, the less out-of-pocket costs for a person who requires significant care.
Even with Long-Term Care Insurance or Medicaid, the needs of an ill person may not be fully covered by any program. Staffing home care patients in the Hudson Valley can be a challenge and Medicaid hours assessments are fundamentally subjective. Private pay is how shortfalls are covered. Early Planning can minimize private pay and out-of-pocket costs. Creating a workable long term care arrangement means utilizing all the available payment methods. Talk to the professionals at Sloan and Feller today to gain a better understanding about long term care planning.