Funding Long-term Care

Growing old these days comes with a tremendous price tag. These days, the scenario where grandma and grandpa are taken care of by their grown children and their families, all together at home, is unlikely. Today’s elderly often need professional care, which can be prohibitively expensive.

The average monthly cost of long-term care is $3,400-$4,500 for assisted living, $6,500-$7,500 for a nursing home, $4,000-$7,000 for memory care facilities, and $8,000-$10,000 for in-home care. Where the average stay in a nursing home is two years and four months, these figures are incredibly daunting.

Fortunately there are ways to help defray these costs. Medicaid, Medicare, Veterans Benefits and long-term care insurance are widely-used methods for covering long-term care costs. But, figuring out whether one or more of these options would work best is tricky.

Medicare is available for anyone, no matter their financial need, who is a U.S. citizen and has worked and paid into Medicare for 10 years. Although widely available, it covers only a limited amount of long-term care. Medicare will only cover up to 100 days in a “skilled nursing facility.”  Long-term care insurance is another option for those able to purchase a policy and pay premiums. Veterans can use their Veterans Benefits to cover long-term care.

Medicaid is yet another option, and provides widespread coverage for long-term care. However, Medicaid is a needs-based program and has strict eligibility requirements. For those with few assets and limited income, Medicaid is a no-brainer. For those with moderate income and assets, Medicaid can still be an option, but only if some careful planning is done.

Although an Oregon resident can only have $2,000 worth of assets to be eligible for income, neither their primary residence nor their car is counted. Other assets like business property, personal property, term life insurance, and a pre-paid “funeral trust” are also excluded in reaching the $2,000 limit. A person with “too many” assets can still be eligible for Medicaid, however, if some planning is done, such as converting non-exempt assets to exempt-assets.

The income limit is $2,199 in Oregon. However, if you earn more income than that, you may still qualify for Medicaid but some planning would be required. Diverting income to something called a “Miller Trust” can be a helpful option.

The bottom line is that long-term care is expensive, but with a little creativity and sensible planning, it won’t lead to financial ruin.

Sarah Vaile is an associate attorney with the Law Office of Robert Good, specializing in estate planning and administration and business law, and has practiced law in Jackson County for eight years. Contact her at (541) 482-3763.