The Benefits of Medicaid (Transcript)
D. "Rep" DeLoach III, Estate Planning and Board Certified Elder Law Attorney
You have people that can purchase long-term care insurance, right? So the lady that set aside as 20% of her assets to pay for her long-term care in the future, but she could access those funds if she really wanted to. She never needed it, for instance.
But there's going to be the people that they're going to have other retirement needs. They're 65 years old, they don't have a nest egg saved up and they probably can't afford long-term care insurance. For instance, long-term care insurance is $4,000 a year and their retirement income is $20,000 a year, there's no way they should purchase long-term care insurance.
What we think about, there's a couple of different things, is that they would always make sure their estate plan is done. They would have a will or a trust, but also making sure, again, their incapacity planning has done. But from a financial preplanning perspective, they may or may not need to do anything. They're just prepared for their death or incapacity if something happened to them. While we would hope and what we think is there's going to be a social safety net that's there, and the social safety net is, not the Medicare side of things, but there's Medicaid.
Medicaid is our social welfare, medical care for the indigent in America, and the people that are disabled or the people that are over age 65 and need long-term care. For instance, Medicaid can help pay for their long-term care. Now if all things are equal, you'd rather plan in advance to pay for your long-term care. But if you, you don't have the funds to do that, then you would look towards Medicaid. And ultimately, you have to figure out whether you do any Medicaid preplanning. We don't necessarily know.
But, for instance, mom is 85 years old and now she's sick and she needs to be in the nursing home. When she runs out of money, Medicaid, the state of Florida and the federal government will help pay for her stay in the nursing home. We have a social safety net that's pretty good in many situations. The real thing is, for instance, from mom's perspective, you ask someone, "Would you ever want to spend time in the nursing home?" And what's the answer going to be? It's "No, I never want to live in the nursing home," of course.
The planning that you can do in advance to try to keep you out of the nursing home is key, but there are people that can't do that. But the government is mostly going to be there. The real problem is, is Medicaid doesn't provide much for in-home care benefits at all. It's very little in-home benefits. If someone has dementia, they can't stay home. Medicaid won't pay for someone to be with them 24/7, and so they can't stay there. Then they could stay in the assisted living facility, and Medicaid can help pay for someone to stay in the assisted living facility and definitely pay for the nursing home, and it may be there to help someone stay in the assisted living facility.
But our social safety net is great for the nursing home, but it's not great for in-home care or even it's not wonderful for paying for assisted living. But that's where you think about is you wouldn't necessarily have to do anything to preplan to access Medicaid except for doing your estate planning, your estate and capacity planning. But you may or may not need to do much to protect assets or anything like that.