Planning for Long-Term Care Costs
You may have always planned to care for your spouse or parents at home rather than move them into a nursing home or assisted living facility. You may have even promised them you would care for them at home. But too often that promise becomes impossible to keep because the level of care they need exceeds your abilities or because you can’t care for them 24/7 at home and also keep the promises to your children, spouse and employer. Often, despite everyone’s best intentions, a long-term care facility can provide the best care for your spouse or parent.
But long-term care can be expensive. Various websites estimate costs for nursing home care in 2020 in the Austin area as ranging from $42,000 to $62,000 per year for a semi-private room and $68,000 to $85,000 or more for a private room.
The actual costs depend on the facility and the type of care required.
So what are your options?
If you can afford to, the best option may be to pay the costs of care out-of-pocket. This gives the family the most control over the choice of type of facility, a private or semi-private room, doctors and other aspects of care. But most of us can’t afford this. At $60,000 plus per year, one spouse can easily spend all of their joint savings to provide care for the other and be left without enough to cover their own expenses. You can also easily spend on long-term care most of what you had hoped to leave to your children as an inheritance.
Long-term care insurance
Long-term care insurance if you have it, can provide significant financial assistance but may not cover all of the costs. It may provide a daily amount toward costs of care (leaving you to cover the rest) or may cover all costs for a limited period of time (again leaving you to cover the costs after that period).
Medicare
Medicare only fully covers the costs of the first 20 days of nursing home health care and only if the patient is admitted within 30 days after they spent four consecutive days in the hospital. After the first 20 days, the patient must pay a copay of $140/day for days 21-100 (or approximately $4,340/month). After 100 days, Medicare no longer pays for nursing home care but may provide some assistance with home care costs – less than 8 hours per day, generally for up to 24 hours per week (possibly up to 35 hours per week under special circumstances). Medicare home health care assistance does not cover 24 hour nursing care, drug cost, meals preparation or delivery, laundry or housekeeping.
Medicaid
Medicaid is left to pick up the remaining costs for many of our families. There are multiple Medicaid programs and a disabled or elderly person must meet state requirements to qualify for the specific program to which they are applying. In Texas, Medicaid has programs that may cover some or all of the costs of long-term care in a nursing home or for care at home. If the patient has income over the eligibility limits, they may have to pay a portion of the costs. The eligibility requirements are complex and there are often ways to qualify someone who does not initially appear to qualify, so you should consult an attorney to discuss your options more fully.
Do I have to sell my home to qualify for Medicaid long-term care benefits?
You may have heard that you can’t qualify for Medicaid long-term care benefits if the total value of all of your resources is over $2000 if you are unmarried or over $3000 if you are married – and that if your resources are higher, you must “spend them down.” This does not mean you have to sell your home to pay for nursing home expenses before you will qualify. You do not. “Resources” for purposes of determining if you are eligible usually excludes your home if you plan to return to it (although it is limited to $600,000 in value if you are single), one car, and most of your household items. If you transfer assets to family members or others in hopes of qualifying, this can result in a penalty period during which you will not qualify for Medicaid benefits. However, if it appears that you are over the resource limits, there may be steps you can take to limit how much you must “spend down” and how you can spend down in ways that will make you or your spouse more comfortable or secure but won’t restrict your spouse’s Medicaid eligibility.
Call now to begin developing a plan before you need one that will help you save on long-term care expenses and protect assets for your spouse and children.