Each year there is a study released by the MetLife Mature Market Institute that closely examines the costs associated with long-term care. The numbers for 2010 indicate that these costs are quite high and trending upward. The national average expense for 12 months residing in a private room in a nursing home last year exceeded $83,500, an increase of 4.6% over 2009 figures.
People interested in living in an assisted living community could expect to pay nearly $40,000 per year in 2010. Once again, these are national averages; in the state of New Jersey long-term care costs are considerably higher with a year in a private room in a nursing home averaging in excess of $100,000.
You may shrug off these figures under the assumption that you are probably not going to need long-term care. Considering the fact that seven out of every 10 people who reach the age of 60 will indeed need such care according to the United States Department of Health and Human Services you may want to adjust your thinking if you are indeed under this assumption.
Some people decide to aim toward Medicaid eligibility as a response to long-term care costs. There is a resource limit of $2000, but some significant assets such as your home, your motor vehicle, and some personal possessions don’t count against this number. So there is a strategy called the “Medicaid spend-down” that is sometimes employed, and it is rather self-explanatory: you spend down your assets in an effort to stay within the Medicaid resource limit.
If you decide to spend down in an effort to qualify for Medicaid it is important to understand that there is a five-year “look-back” period. You are penalized for divesting yourself of assets during the five years preceding your application for Medicaid. The penalty is based on the cost of long-term care in your state. For example, if the average monthly cost is $5000 and you gave away $50,000, your eligibility would be delayed by 10 months.
To explore the matter further and gain an understanding of your options for addressing long-term care expenses, simply arrange for a consultation with an experienced elder law attorney.
- Medicaid Attorneys Explain How a Pre-Paid Funeral Contract Can Help - March 31, 2021
- What Is a QTIP Trust? - March 25, 2021
- How Would You Feel about a Robot Caregiver in the Future? - March 18, 2021