MOST SENIORS NEED
NURSING HOME CARE
PLAN AHEAD FOR MEDICAID SPENDING
BY RICHARD BAIRD, JD AND MICHAEL SMITH, JD
L engthening life spans and soaring health care costs are
increasing the chances that seniors will need Medicaid
to pay for nursing home care.
The 2019 Genworth Cost of Care study found that 10,000
Baby Boomers a day will be added to the ranks of senior
citizens (those 65 and older) between now and 2030. The
study concluded that 7 out of 10 seniors will require longterm
care at some point in their lifetime.
The cost of care at assisted living facilities and nursing
homes is outpacing the U.S. inflation rate, according to the
study, causing seniors to quickly deplete their savings. The
study found that the average cost of a semi-private room
in a nursing home in the United States is $7,513, more than
triple the average senior income. Accordingly, it is not
surprising that 62 percent of nursing home residents in the
United States rely on Medicaid, according to a 2015 Kaiser
Family Foundation study.
Once the safety net of the poor, Medicaid has quickly
become the only option for solidly middle class retirees who
have exhausted their insurance and outlived their relatives
and resources. With the high likelihood that Medicaid may
be in your future, it is prudent to speak to an elder law
attorney about your options.
It is important to speak to an elder law attorney about longterm
care possibilities before you or your spouse require
treatment. First, long-term care is often required for an
illness or an injury that may render the patient incapable of
making decisions about his treatment. Secondly, the stress
or immediacy of the illness or injury may limit your capacity
for making wise decisions. Finally, Medicaid is a complicated
government program that many people misunderstand
and you could unknowingly render yourself or your spouse
ineligible without proper council.
If you speak with an elder law attorney now while you and
your spouse are healthy you can explore all of the possible
options based on various scenarios. Depending on the
severity of an illness or injury, you may want to consider the
much less expensive option of an assisted living facility or
home health aide rather than a nursing home. Planning now
will allow you to visit different facilities and compare prices,
something that may not be possible in a crisis.
Your elder law attorney can also discuss the difference
between Medicare and Medicaid, and different long-term
care payment strategies including long-term care insurance,
reverse mortgages, and Medicaid planning.
As with anything, time always gives you more options. If
you think you may need Medicaid in the next five years you
need to be very careful about financial decisions. Medicaid
has a five-year look-back period and any financial moves that
appear to divert your savings to qualify for Medicaid could
hurt your eligibility. Something as innocent as taking out a
home equity loan or giving a child money to pay for college
expenses could result in a penalty.
Medicaid has strict income and asset limitations. The
maximum allowable income to qualify for Medicaid in most
states is $2,313 and the maximum asset limit is $2,000 for
countable assets. Countable assets include banks accounts
and a second home, but do not generally include a primary
residence or vehicle. A spouse that does not require nursing
home care is allowed $123,600 in assets as a community
spouse resource allowance.
Because everyone’s financial situation is different, it is
important to consult with a qualified elder law attorney
to determine whether or not you qualify for Medicaid and
how you may want to structure your assets to preserve your
spouse’s resources without affecting your eligibility.
Richard Barid and Michael Smith are co-founders of
Savannah-based law firm Smith Barid LLC, which focuses
on estate planning, special needs planning and elder law
planning. They can be reached at 912-352-3999, richard@
smithbarid.com or msmith@smithbarid.com.
24 TODAY’S CAREGIVER MAGAZINE • CAREGIVER.COM
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