When someone is no longer able to live at home alone due to advanced age or a chronic illness (i.e., dementia, Parkinson's, injury), he or she may need to stay in a long-term care facility. Long-term care facilities are generally going to be either assisted living or the nursing home. We know that these facilities can be very expensive, ranging from $2,000-$7,000/month (assisted living) to $8,000-$11,000/month (nursing home). So how can someone pay for their long-term care, and are there government benefits to help? We generally look to the following options for paying for long-term care:
- Self-Pay: If someone has a lot of money, he or she may not need or want to "protect assets" from the nursing home. Importantly, the nursing home does not "take your assets" in order to pay for care. The nursing home just needs their monthly rent paid, usually in advance. Medicaid planning can be helpful for those who want to try and protect assets, as discussed below.
- VA Benefits: We generally look to VA benefits to pay for the assisted living facility while we generally look to Medicaid to pay for the nursing home. The main reason is that the nursing home is so very expensive while VA benefits are generally more limited. The VA Pension program can give money to help pay for long-term care in many situations. The VA will provide cash payments to qualified veterans and surviving spouses of wartime veterans with countable assets generally below $80,000. Benefits here generally range from $2,169/m for married veterans and $1,176/m for the surviving sposue of a wartime veteran. Due to these amounts we generally do not look to the VA to pay for nursing home care as the nursing home is so very expensive.
- Medicaid: Medicaid is available for Florida residents who are in either the nursing home or assisted living facility. Medicaid benefits for assisted living are more limited than the nursing home as explained in this blog post. Medicaid will help pay for long-term care if the applicant:
- Is a Florida resident;
- Is a United States citizen or qualified alien;
- Meets physical requirements (i.e., needs long-term care)
- Has income below the income cap ($2,250/month in 2018). Learn more about Medicaid and income here;
- Has assets below the asset limit ($2,000 in countable assets for a single person, $125,600 for a couple in 2018). We have more on countable v. non-countable assets here;
- Applies for Medicaid benefits; and
- Has not made disqualifying transfers within 5 years of needing long-term Medicaid.
One key to looking at your options is knowing that you should talk to a board certified elder law attorney. Why is that?
- You do not know what you do not know. If you have not done this before, or even if you have, a good elder law attorney can review your situation and discuss what government benefits are available to help.
- Asset protection can be done for both VA and Medicaid benefits. A good elder law attorney can help legally protect assets, even if mom or dad is already in the nursing home.
- You cannot give money away within 5 years of the Medicaid lookback period. Please do not give money away to try and protect assets without good legal advice. Besides, you do not have to give money away when there are good asset protection options even if mom or dad is already in the nursing home.
- Medicaid spend-down planning can be very useful in the right situation.
- You may want to try and get VA benefits now but Medicaid benefits later.
So what should you do to prepare for your long-term care?
- Have a good durable power of attorney! This may be the most important step, by far, as a good power attorney contains the powers to protect assets from the nursing home.
- Make sure your estate plan is order with a last will and testament or revocable living trust.
- Make sure the elder has his or her advance directives completed as well.
- Consider creating an irrevocable asset protection trust five years before you need long-term care.
There is a great deal to know when your loved one needs long-term care. We have more on the following topics: