Elder law attorneys assist clients who are concerned about the eventualities of aging, and there is one challenge that stands above all others from a financial perspective. Seven out of every 10 people who are turning 65 on this day will eventually need long-term care.
Some will be able to receive the assistance they need from unpaid caregivers like family members and friends. However, 52 percent of elders will incur long-term care expenses, and 35 percent of seniors will live in nursing homes according to the Department of Health and Human Services.
Projected 2036 CT Long-Term Care Costs
Genworth Financial is the go-to resource for information about the state of long-term care costs because they conduct in-depth surveys each year. They are now making projections about future costs based on the recent trajectory.
According to their research, the median charge for a private room in a Connecticut nursing home will reach $283,619 12 years from now in 2036. The average length of stay is one year, but just over half of people who need paid long-term care receive it for over a year.
A lot of seniors engage in-home health aides to provide the assistance they need because they are still capable of living in their own homes. In-home care can be an excellent solution because people can receive sound professional care without moving into nursing facilities.
This being stated, there are cost considerations. According to this survey, the median annual charge for an in-home health aide in our state will be just under $100,000 in 12 years.
Medicare Myth
Medicare exists to address the healthcare needs of older Americans. Most seniors will need long-term care, so many people assume that Medicare will pay for it.
This is not an unreasonable expectation, but in reality, Medicare does not cover long-term care. The program will pay for convalescent care when recovery is anticipated, but the coverage does not extend to the custodial care that nursing homes and in-home caregivers provide.
Medicaid Eligibility
Fortunately, you do not have to resolve to pay for long-term care expenses out of your own pocket if you take the right steps in advance. Medicaid will cover custodial care if you can gain eligibility, but that is easier said than done because it is a need-based program.
There is a low $1,600 asset limit in Connecticut, but one motor vehicle and your wedding and engagement rings do not count. Administrators are not concerned about your household furnishings and other items that you have in your possession that are of nominal value.
Prepaid burial plots and unlimited term life insurance are exempt along with $1,500 saved for final expenses, and the same amount of whole life insurance.
Home Ownership
A home is not a countable asset for Medicaid eligibility purposes (with a $1.071 million equity limit), so your application could be approved if you are a homeowner. This can be reassuring, but there is a Medicaid estate recovery mandate. If you own a home when you die, the program can place a lien on the property.
Irrevocable Medicaid Trust
Your nursing home asset protection strategy can revolve around the utilization of an irrevocable trust. You can convey your home and income-producing countable assets into the trust. While you are living independently, you can continue to accept distributions of the trust’s earnings.
The principal would be out of your reach, but it would not count if you applied for Medicaid with one stipulation. There is a 60-month look-back period, so you have to fund the trust at least 60 months before you apply for Medicaid coverage.
With regard to the home, it would not be part of your estate if you conveyed it into the trust. As a result, Medicaid would not be able to go after the property during the recovery phase.
Schedule a Consultation Right Now!
Today is the day for action if you are going through life without a plan for aging. You can send us a message to request a consultation, and you can schedule an appointment at our Westport or Glastonbury, CT elder care planning offices if you call us at 860-548-1000.
Mr. McCann is licensed to practice before the courts of the State of Connecticut. He is a member of the American Academy of Estate Planning Attorneys.
Mr. McCann provides to his clients, trust and estate planning, and trust and estate administration services. Formerly, Mr. McCann was an adjunct professor of economics in the State of Connecticut Community College system, and a Commissioner of the Town of Simsbury Zoning Board of Appeals.