You or someone in your family has probably said it: “I will never go into a nursing home.” The problem is that nursing homes are full of people who were never going to enter a nursing home. Two out of every three people will need a higher level of care in the later years of life. The nursing home is often the only safe and appropriate way to support a family member. Given how expensive higher levels of care can be, every middle class family needs to consider how they plan to pay for that care.
If you knew there was a good chance that someone would come after you for over $10,000 every single month, wouldn’t you want professional help to avoid or lessen that financial burden?
To save money, or because they feel they have no other choice, caregivers may decide to keep their loved ones at home longer, potentially risking their own and their loved one’s well-being. If an older adult is hospitalized for a fall or illness, followed by rehabilitation in a nursing home, a crisis occurs when notification is received that Medicare coverage will end much sooner than expected.
Medicare only covers the cost of a nursing home stay under limited circumstances (https://www.medicare.gov/coverage/nursing-home-care). While the Medicare benefit will pay for up to 100 days of care in a nursing home, very few people meet the requirements to receive this full benefit. 20 days of coverage is a much more common scenario. Whether or not your Medicare benefit is paid through a private insurance company or the federal government can also impact the approved length of stay (https://keystoneelderlaw.com/medicare-open-enrollment-2/).
Since less than 6% of adults ages 50 and older own a long-term care insurance policy (National Association of Insurance Commissioners, 2019), payment for nursing home care is frequently out of pocket. Genworth reports that the median cost of nursing home care in the Harrisburg area in 2021 was almost $11,000 per month for a semi-private room. While this amount may sound unreasonable to some, providing for the needs of dependent adults 24/7 is by no means a walk in the park.
The primary public benefit which is available to help families pay for nursing home care is Medicaid, also known in Pennsylvania as Medical Assistance (MA). Medicaid is also available to pay for select home and community based services. The basic understanding is true that in order to receive Medicaid, an individual is only permitted to own a minimal amount of assets. However, the government also makes it possible for middle class families to qualify for this benefit.
Some people believe that money must be “hidden” in order for an individual to meet the financial eligibility guidelines for Medicaid. Attempts to hide assets or to give them away in order to qualify for Medicaid is NOT recommended, since they are likely to backfire and create financial hardship for the individual. Family members may also face significant risk in this type of situation since Pennsylvania law allows for nursing homes to pursue the collection of unpaid bills from one or more of the children of a resident who does not have the funds to pay for care.
Various tools and strategies are available to help protect assets from the cost of long-term care and create eligibility for Medicaid. The timing of an individual’s planning, as well as the situation and their specific goals, will influence the type of strategy which should be used. Even if your loved one is already in a nursing home, techniques are available to create financial eligibility for Medicaid before all of the person’s assets have been spent on the cost of care. These techniques are legal and are practiced nationwide, although each state’s rules may differ somewhat.
One common myth among families is that a nursing home may force the sale of a person’s house in order to pay for care. In the case of a married couple, the house is automatically protected for the spouse who remains in the community, although the potential loss of all or a part of the income of the person in the nursing home may influence the spouse’s financial ability to remain comfortably in the home. For a single individual, circumstances will determine if the house can be kept in the family. An elder law attorney can help families sort through all of the regulations and options in order to create a plan which meets the individual’s or couple’s goals as closely as possible.
The process of applying for Medicaid requires a lot of paperwork and it should be seen as a significant legal issue where a lot of money is on the line. The staff members of a nursing home’s business office will assist families with this application process for no additional charge. But those staff members are not trained, nor do they have any incentive, to help families use legal tools to save money while creating eligibility for Medicaid. In fact, nursing homes get paid more while you are on private pay status than they do under the Medicaid program.
Carlisle is fortunate to have excellent nursing homes. The staff in those facilities often see opportunities for a family to save money and refer those families to an elder law attorney. If someone you know is concerned about the cost of long-term care, planning should start as soon as possible to achieve the greatest savings.
Whether a person has $50,000 or $850,000 in savings, a consultation with an elder law attorney will help families better understand the choices that are available and the steps that may be necessary to lessen the impact of nursing home or other long-term care expenses. A free initial telephone call (717-697-3223) can help you decide if meeting with an attorney would be helpful, and has the potential to change your family’s future.
Karen Kaslow, Care Coordinator