Most of my elderly clients have the same fears about aging and their families. They are concerned about paying for long-term care, they want to stay at home (age in place), and they don’t want to burden their kids. In many instances, families can keep an aging parent at home and care for them. But what happens if there is a fall or serious condition? That’s when the reality sets in that an aging family member must go to a nursing home, because they can provide skilled nursing care that a family member or assisted living facility cannot provide.
In these cases, the family member usually has Medicare coverage and believes that their care will be covered. It’s true that Medicare does cover the cost of a long-term nursing home stay, but only for the allowable maximum 100 days, which is usually a surprise. Beyond that point, Medicare does not cover the costs of long-term care. And that cost can be significant.
According to the annual Genworth cost of care study, and adjusting for inflation, in 2021, the annual median cost of a single room in a nursing home in our area was $106,584.
What are the options for paying for long-term care?
There are three primary methods of paying for nursing homes or assisted living facilities:
Privately paying for care can often mean spending one’s life savings or selling one’s home to pay for their care. Because the cost of nursing homes in Northeast Florida ranges from about $5,000 to $12,000 per month, the costs add up quickly. Assisted living facilities are generally about half the cost of nursing homes, but unfortunately still cost too much for many to pay without outliving their savings. The sad reality is that many end up spending all of their savings to pay for long-term care and have nothing left.
Long-term care insurance can be a viable option, if you already have a plan in place. Those who need care but do not have long-term care insurance usually either cannot qualify for the policies or cannot afford the premiums. Long-term care insurance is therefore often not an option.
Our last options are qualifying for needs-based programs through the VA and/or the Medicaid program. In Florida, Medicaid pays for almost all nursing homes and increasingly covers assisted living facilities as well. But in order to qualify for Medicaid, applicants must have a net worth of less than $2,000 and monthly gross income below $2,742 (2023 figures). These restrictions leave out the majority of the population except for the indigent.
This is where legal planning can make a big difference. Despite the restrictive rules, there are ways to ethically and legally convert countable assets to non-countable assets, so that you can keep some savings and still qualify for Medicaid. This is done not out of greed, but of necessity so that an elderly patient is not left penniless at the cost of long-term care. Before committing to paying out of pocket, find out about the ways you may be able to plan effectively for the costs of long-term care.
Emily Hicks Law PLLC, 822 A1A N., Suite 310, Ponte Vedra Beach, offers elder law and long-term care planning, as well as estate planning — wills, trusts, powers of attorney and health care documents. For further information, go to EmilyHicksLaw.com, call 904-280-6820 or email Emily@EmilyHicksLaw.com.
