Growing old gracefully and living a long-time are all very nice thoughts. However, it is fraught with financial mine-fields that many of us have not considered. This is a short summary of some of the issues you will need to prepare for. The healthcare system and process are highly complex, so I am generalizing in order to keep it simple.
Long-term-care costs reside on a sliding scale between a few dollars per month (for example, someone coming in to help clean the house) to $90,000 per year for skilled nursing home care. These costs can be paid by your insurance company (if you have long-term-care insurance), you, or your family.
Medicare helps pay for some of your hospital, physician, and drug costs. It will not cover the entire cost so you will need to pay for some costs out-of-pocket and/or purchase a Medicare supplement plan. With some nominal exceptions, Medicare will not cover the cost of long-term-care.
Medicaid is a system that may help pay for some of your health care costs not covered by Medicare, including long-term-care expenses.
FACT – You must be effectively broke before Medicaid will help pay for your in-home, outside-of-home, and/or skilled nursing long-term-care needs. You must spend down your long-term-care insurance and your personal assets before Medicaid will help.
FACT – You can become artificially “broke” by gifting your assets to your children. Generally not a good idea as they (or their spouse) may run off with your gifts. Medicaid also has a five year look-back period.
FACT – Medicaid may sue your estate if they covered the cost of your care and later learn that your assets were gifted or hidden. Your beloved home may also be fair game for Medicaid to take from your heirs after you have passed-on.
Why is this happening? There are roughly 10,000 of us turning 55 every day for the next 20 years. We are overwhelming our medical resources and someone has to pay for it.
The cost of daily living is not free for any of us either as children, adults, or senior citizens. Children are generally cared for by parents. Adults generally pay their own way. The elderly must generally pay for their own care through savings and insurance.
Alternatives? Yes… you can die young and healthy, you can take your chances, or you can call us to evaluate your options.
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