The matter of long-term care is a very pressing concern within the elder law community.
A high percentage of seniors will need assistance with their activities of daily living at some point in time. Statistics have been compiled by the United States Department of Health and Human Services. According to their data, no less than 70 percent of individuals who are reaching the age of 65 will someday need assistance with their activities of daily living.
The Wide Reach of Alzheimer’s Disease
Many of the people who need long-term care are suffering from Alzheimer’s disease. We have all heard of this disease, but you may be surprised to learn about the widespread nature of Alzheimer’s.
Everyone should have an understanding of this disease, and you can learn a lot about it on the Alzheimer’s Association website. The site houses a vast store of information, and it is a very valuable resource.
The Alzheimer’s Association tells us that one out of every eight seniors is suffering from Alzheimer’s disease. This equates to 12.5 percent, which is a relatively significant figure.
As you get older, this percentage increases. Alzheimer’s disease strikes over 40 percent of people who are 85 years of age and older.
Alzheimer’s disease causes dementia, and those who are suffering from dementia are typically going to become unable to handle all of their own affairs. When you absorb the statistics, you can see why everyone should be concerned about the impact of Alzheimer’s disease.
Long-Term Care Costs
Many people who are suffering from Alzheimer’s disease ultimately reside in nursing homes, because they need care that simply cannot be provided at home. There are those who are under the impression that Medicare will cover everything once you become a senior citizen. In fact, Medicare will not help with the costs if you need nursing home care.
Long-term care expenses can consume your savings in a hurry if you have to pay out-of-pocket. Our firm practices in the state of California. According to a study that is being conducted on an ongoing basis by Genworth Financial, the median cost for a year in a private room in a nursing home in our state was $104,025 in 2015. The average length of stay is in excess of two years according to a government survey that was conducted relatively recently.
How do you pay for long-term care without exhausting everything that you have put aside for retirement? For many, the answer is Medi-Cal.
The Medicaid program is in place to provide health insurance for people with financial need. It is jointly administered by each respective state governments along with the federal government. In California, the program is called Medi-Cal.
Medi-Cal is a program that will pay for long-term care. However, you must meet certain eligibility parameters in terms of your earnings and income, because it is a program that is based on financial need.
A single person cannot have more than $2000 in countable assets, but everything that you own does not count when Medi-Cal is determining your eligibility. You can potentially retain the non-countable assets and engage in a Medicaid spend down to qualify for Medi-Cal.
A very significant percentage of people do in fact obtain Medicaid/Medi-Cal coverage late in their lives. The majority of long-term care that is received by seniors in the United States is paid for by this program.
You may have an idea hatching in your mind at this point. You could hold on to your assets, and if you find out that you need long-term care, you could simply give your children their inheritances in advance. At that point you would have limited assets in your own name, and you could qualify for Medi-Cal.
The “fly in the ointment” as it were is the look-back period. Across most of the country there is a 60 month look-back. You are penalized, and your eligibility is delayed if you give away assets within five years of applying for the program.
In California things are a little bit different at the present time. Eventually, all of the states must implement the 60 month look-back, but California has a shorter look-back at the time of this writing. Right now, the California look-back period is 30 months.
If you divest yourself of assets within 30 months of applying for Medi-Cal, your application will be denied.
Because of the look-back, you would do well to implement a Medi-Cal plan as soon as possible if you see early signs of dementia in yourself or someone that you love.
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