Nursing Home Funding

The decision to place a spouse or loved one into a nursing home is often a difficult one, and stress and anxiety typically surround this determination. On top of the pressure to choose the right facility, or the difficultly coming to terms with the surrendering of control to a new caregiver, most of us would prefer to avoid the additional uncertainty of how to cover a nursing home’s extensive costs. There are several options available to plan for alleviation of this financial burden, and since this is a decision that many Americans will face at some point in their lives, it is important to talk to a legal professional and decide which of these options will work best for you.

A majority of individuals have health insurance, but very few have long-term care insurance to cover the cost of care in a nursing home or assisted living facility. Moreover, with rising healthcare costs, many of those who do have long term-care insurance are underinsured. This leaves individuals with the choice to either pay for additional costs out of pocket or enroll in a government program. With the exception of those with substantial wealth, people paying out of pocket are often forced to seek out creative ways to liquidate their assets, such as taking out a reverse mortgage. While a reverse mortgage can quickly and effectively help one convert their home’s equity into cash, this is not a smart tactic for single individuals or those who want their children or other family members to inherit their home.

Thus, most people find it necessary to enroll in a government program. Medicare and Medicaid are the two principal government plans for covering the costs of medical and long-term care. There are many misconceptions about these plans, notably that they are welfare programs that primarily serve low-income families. In reality, the majority of individuals enrolled in Medicaid are the elderly and people with disabilities. Most individuals will require assistance at some point in their lives so it is wise to learn about these programs and the ways they can help cover long-term care costs in the future.

Medicare is a federal health care insurance program that provides coverage for people 65 and older. It provides limited, short-term coverage for some of the costs associated with long-term care. Medicare eligibility primarily depends on employment in a Medicare-covered workplace for 10 years or longer and residency in the United States. It can help with brief hospital stays, physician visits, or prescription drugs, but does not cover most nursing home stays. There can be significant out of pocket costs on top of existing Medicare programs.

Medicaid, on the other hand, provides long-term care coverage for individuals who qualify. For most people, Medicaid support is imperative for covering the costs of nursing home stays or in-home care, which can vary anywhere from $80,000 – $100,000 per year. To qualify for Medicaid, one must require medical assistance and fall below a certain asset level. Requiring medical assistance essentially involves needing assistance to engage in the activities of daily living, and the asset limit in Colorado precludes eligibility for individuals with more than $2,000 worth of countable assets. If you believe that your assets may prevent you from qualifying, our attorneys can help. We will advise you as to which assets may qualify for exemption and how to transfer your assets strategically so you can receive these supportive services.