You may have heard people talking about the need to consult with a Medicaid planning attorney and wondered why you would need one. After all, you have never before relied on Medicaid to cover your health care expenses. What you need to know, however, is that there is a very good chance that you (or a spouse) will need to rely on Medicaid at some point during your retirement years because of the high cost of long-term care. A Medicaid planning attorney will help you plan for the possibility that you will need to qualify for Medicaid as a senior and help ensure that the need for Medicaid eligibility does not put your heard-earned assets at risk.
Will You Need Long-Term Care?
The likelihood that you will need to qualify for Medicaid is directly related to the need to cover the high cost of long-term care (LTC). As you age, the likelihood of needing LTC increases dramatically. When you enter your retirement years, around age 65, you stand about a 50 percent chance of eventually needing LTC. If you are married, your spouse has the same odds. The longer you live, the more those odds increase. If you are still here at age 85, your odds will have increased to a 75 percent chance of one day needing LTC, and the cost of that care will be high. Nationwide, the average monthly cost of LTC runs about $6,500, or just over $80,000 per year. In the State of New Jersey, you can expect to pay considerably more for LTC at an average yearly cost of about $130,00. With an average length of stay of 2.5 years, that means that an average LTC bill in New Jersey could run you well over $300,000 today. After taking into account that fact that the cost of LTC is expected to continue to rise in the years to come, it becomes clear that LTC expenses could seriously threaten your nest egg if you have to cover those costs out of pocket.
How Will You Pay for LTC?
The biggest problem with the high cost of LTC, however, is that neither your basic health insurance coverage nor Medicare will cover it. Unless you purchased separate LTC insurance, it is unlikely that your health care plan with pay for the expenses related to LTC. Medicare only covers LTC under very limited circumstances – and even then, only for a short period of time. Therefore, unless you can afford to pay for LTC expenses out of pocket, which is unlikely considering the cost in New Jersey, you will likely end up turning to Medicaid for help if you (or a spouse) do end up needing LTC.
Why Do I Need a Medicaid Planning Attorney Now?
It should be clear at this point that if you do end up in LTC, you will likely turn to Medicaid for help covering the cost of that care. Unless you plan ahead for the need to qualify for Medicaid you could be putting your assets at risk. Because Medicaid is intended to cover low income individuals and families, there are strict income and asset limits that cannot be exceeded by applicants. With an asset, or “countable resources,” limit of as low as $2,000 it should not be surprising that many seniors don’t initially qualify. If your assets exceed the program limit, Medicaid will impose a waiting period during which time you will be expected to “spend-down” your assets. In essence, this means you are expected to liquidate your assets and use the money to cover your LTC expenses during the waiting period. The key to preventing the loss of your assets is Medicaid planning. A Medicaid planning attorney can help you incorporate Medicaid planning strategies and tools into your estate plan now so that you don’t have to lose hard-earned assets down the road.
For more information, please join us for an upcoming FREE seminar. If you have additional questions about Medicaid planning, or if you wish to get started incorporating Medicaid planning into your estate plan, contact the experienced New Jersey Medicaid planning attorneys at Augulis Law Firm by calling 908-222-8803 to schedule your appointment today.