The impact of not planning for long term care now could be devastating for your financial future.
Building wealth is not the only reason for good financial planning. Protecting the wealth you have already accumulated is also essential to the financial well-being of your family.
Medicaid rules and regulations have become so complex it’s important to seek advice from a well-qualified firm the knowledge, experience, and resources to guide you through the process.
No matter what your age, if you have assets, you need to make smart decisions about how to protect them. “Assets” include: Any type of savings, Real Estate, Retirement Accounts, Collectibles, a Business, and Life Insurance.
One of the best things you can do right now for you and your family is get legal, financial and care plans in place. Doing so allows you to participate in making decisions and ensures your family won’t be forced to make them for you in a crisis situation.
FGC Family Confidence Solution
Plan ahead, starting today, to be prepared for a long-term care crisis.
The cost of long-term care has many families concerned about their financial future. Families often find themselves having to spend all of their life savings to pay for extended care for a loved one. Guidelines allow the state to take homes to recover Medicaid expenditures. Medicaid is a program that helps with medical costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, like nursing home care and personal care services. Medicare will usually pay a maximum of 100 days of rehab in a long-term care facility. The family then becomes responsible for all expenses.
Applied knowledge is power. It is critical for you to develop a plan to protect yourself, your loved ones and your assets from the catastrophic consequences of a long term care illness. If you do not plan ahead, the burden of providing emotional, physical or financial assistance for your care will fall upon your loved ones.One of the best things you can do right now for you and your family is get legal, financial and care plans in place.
We serve families seeking guidance in navigating the many facets of long-term care planning. Our geriatric care managers evaluate specific family situations and make recommendations that are in your loved one’s best interest.
Dangers of Denial
In his article “Long-Term Care — An Impending Crisis for the Elderly,” Thomas Day, the director of the National Care Planning Council, estimates that:
- 6 out of 10 people who are single will need nursing home care during their lifetime.
- 8 people out of every 10 couples will need nursing home care during their lifetime.
- 70% of us who live past the age of 65 will spend a substantial period of time in a long-term care facility.
- Anyone reaching the age of 65 years has a 40% chance of entering a nursing home during their lifetime, with a 20 percent chance of staying there for at least five years.
- Most health insurance does not provide coverage for long-term care. Neither does not Medicare
- Going Broke
- No Experience: Not knowing the rules and laws leads to delays
- Marketplace Confusion: Hiring the wrong professional
- Not being prepared
- Waiting until it’s too late
- Family Infighting
- Difficulty dealing with the State bureaucracy
An area of great concern to many families is the potential financial drain that a long-term stay of a loved one in a nursing home can have on family finances. The current cost can run from $50 per day to over $200 per day. The period of care may extend for years, as is sometimes the case with Alzheimer’s disease, arthritis or stroke.
The only answer, if you have not accumulated great wealth, is to purchase a long term care plan from a reputable insurance company. Of course, the insured must be healthy at the time of application for coverage and the present age plays an important part in determining the premium. From one company the non-guaranteed annual premium cost for $100 per day coverage ranges from $420 at age 55 to $3,680 at age 84. This illustrates the advantage of early purchase.
Buying this type of insurance is not easy! Two well-known insurance companies have both recently discontinued all of their health products. Another company has increased the premium rates on nursing home policies each year for the previous three years. On the other hand, some very well respected insurance companies recently improved the provisions of their long term care policies. The premium cost is just one aspect, but there are other considerations you should review before making a commitment to this kind of policy.
- The maze of “limitations” in policy language
- Policy “exclusions” of coverage
- Premium rate increase restrictions
- These “exclusions,” “conditions,” etc. can be critical to your decision. As in any other type of insurance product, make a thorough investigation before you buy. Your insurance advisor or personal financial planner should be able to explain the details.
While we are on the subject of “protecting wealth” the requirements of who can qualify for Medicaid suggests a cursory review. The answer is, you must be nearly broke – with the exception of the equity in your home.
The requirements of who can qualify for Medicaid suggest a review since everyone is concerned with protecting wealth. The following is admittedly over simplified, but in essence (to qualify for Medicaid), if you are single you must be impoverished. If a person is married, the spouse may keep the family residence, a car and $65,000 in other assets. This amount will vary slightly by state of residence. The $65,000 in assets could not, by any investment available, provide sufficient income to pay for long term care of the spouse if needed later.
Under the present Medicaid “Rules of Eligibility” for married couples, there is not a distinction between joint assets with right of survivorship and those assets that are held individually. Joint assets do, however, generally avoid probate, but that is not much of a savings if they are consumed in order to qualify for Medicaid.
Much has been written about the advantages of joint and survivorship accounts, but Medicaid includes these kinds of funds in determining eligibility! Would it not be a wise financial planning strategy for elderly couples to have his and her assets in respective individual names? By doing so, at least half of their mutually accumulated wealth would be preserved in the event a costly and prolonged illness was to strike. This is essentially the same plan of action wealthy couples employ when structuring marital trust wills. The one advantage a joint and survivorship account admittedly has over an individual registration is that these funds avoid probate. However, if the size of the estate warrants, this can be easily overcome by using a contingency trust.
Today, it’s essential that everyone incorporate Long-Term Care into their financial plan.
Contact a representative today and schedule an appointment to discuss your insurance needs.
Call us at 903.533.8585