Many people nearing retirement age assume they are prepared for the golden years if they have diligently saved a nest egg and paid into a life insurance policy. What they do not realize is the exorbitant costs of facility care later in life. Life insurance can only be invoked for loved ones after death, and retirement savings can only take you so far. If you require a home health nurse or around-the-clock care in a care facility, how will you pay for it? Long-term care planning strategies can help you ensure your future needs are protected without tapping into your savings or items you intend to bequeath to loved ones.
What is Long-Term Care Planning?
Long-term care planning is a strategic plan to allocate funds or resources in order to pay for care facilities and medical needs in advanced age. Crisis planning is utilized when a loved one requires facility care or even home health assistance in the near future. Pre-planning details the planning stages required to effectuate a complete long-term plan.
Long-term care planning usually requires a thorough review of your financial snapshot (debts, equities, investment portfolio, and other assets) to get a better idea of the funds you have available to pay for increasing medical costs. Because the average yearly stay at a long-term planning facility can exceed six figures, it is important that you devise a strategy to provide the care of a spouse or your own needs should you require it.
What About Social Security and Medicare Benefits?
Many Americans mistakenly think that Social Security, disability (SSDI) or Medicare benefits cover long-term care needs like assisted living, nursing home facilities, or palliative care. Unfortunately, neither Medicare nor Social Security benefits authorize coverage for long-term care. The Center for Medicare Services (CMS) classifies long-term care as “custodial care.” Custodial care services are not covered under any plans through the federal government or private payers like Carefirst Blue Cross Blue Shield, Cigna, Aetna, or other major health insurance providers. CMS states that long-term care is not covered because it consists of activities and assistance that are not medical services, like helping an elderly resident prepare meals, get dressed, or clean their home. “Daily living” activities simply are not covered. This means many elderly loved ones who require intensive care needs must cobble together funds to pay for exceedingly high long-term care facility costs. However, if an elderly loved one meets certain qualifications, Medicaid can be utilized to pay for long-term care. To qualify, the individual must meet very particular standards. To that end, a strategy is needed to not only achieve Medicaid eligibility but also to protect assets.
Contact Darpel Elder Law Today!
If you have questions regarding long-term care planning, obtaining long-term care Medicaid benefits or estate planning, contact Darpel Elder Law. Our attorneys focus in elder law and long-term care planning and have helped clients in Kentucky for more than 35 years. Call today to schedule a consultation and make a long-term care plan.