Roger and Elizabeth sat in their comfortable home discussing their plans now that the couple had retired. He had worked as a home contractor in Connecticut and she as a nurse in Rhode Island. They had just returned from a cruise to Alaska and were about to plan another long vacation, something they had forgone for decades because of their careers. But that could be discussed later as Roger had an appointment with a trainer at the local Gym and Elizabeth was going shopping with her daughter at the local outlets. They said goodbye to each other and attended to their respective plans.
Later that morning at the gym, Roger received a frantic call from his daughter telling him that mom had collapsed at the mall and was transported to the hospital by the EMTs. Rushing to the emergency room, he found out that she had suffered a massive stroke.
After several weeks of medical care, she was transferred to a nursing facility where
Roger was approached by a social worker asking about his finances and how he intended to pay for her care. He never really gave thought to this and when he was told that care would cost over $8000 a month, his heart dropped.
First, he was faced with the terrible news about the illness of his wife of over 50 years and now the loss of the savings and property the two had accumulated during their life together and that both had viewed as a great start for a college education for their grandchildren.
In speaking with the social worker, he found out that although they had Medicare, that program would not pay the costs of care. It was explained to him that Medicaid would pay for care but only if he qualified. Once Roger discussed what the couple had in property and bank accounts, he was told that he was currently not eligible for Medicaid benefits because he had too many assets to qualify. Roger sat back, put his head into his hands and broke down.
This, unfortunately, is a story that occurs every day throughout this country and why Medicaid Planning is a necessary part of future and is needed more and more as the baby boom population enters retirement.
Let’s look at the trends;
The United States census bureau figures show that the percentage of older Americans will increase tremendously over the next half century, nearly doubling since the beginning of 2000. In actual numbers, around 12% of our population turned 65 at the beginning of this century but by 2050, nearly a quarter of the United States population will be 65 or older. A number even more remarkable is that staring in 2011 and ending in 2030, it is projected that an average of 10,000 a day will reach retirement age.
On the face of it, more people retiring sounds nice but the reality is that as we age, our body begins to break down and the obvious health issues associated with that begins to increase. Although we are living longer than ever, we may not be healthier than ever.
The numbers support this as well. Between 2000 and 2030, the numbers of Americans living with chronic conditions is projected to increase by 37%, nearly 46 million people! By 2025, the number of people aged 65 or older with Alzheimer’s who require care is expected to increase by 30% to 6.7 million and by 2050, this number is expected to triple.
So although we stay alive longer, we also incur more medical costs and in the end, spend more time in nursing and rehabilitation facilities and without proper planning, everything that has been acquired in life and hoped to be passed on to children and grandchildren can be wiped out very quickly without proper planning.
So let’s look at these costs.
Using the Genworth cost study guide, we projected the monthly costs of care for seniors who may need it out twenty years for citizens of Rhode Island, Massachusetts and Connecticut.
Please keep in mind that these are just monthly projections!
Looking at these figures, in twenty years, the costs almost double. For someone in nursing care for a year with a private room in Rhode Island today, the annual cost would be $107,148 and in 2038, $193,524. This is an average and some facilities in Providence will have higher costs.
Looking at these figures, in twenty years, again the costs nearly double. For someone in nursing care for a year with a private room in Massachusetts today, the annual cost would be $154,140 and in 2038, $278,400 - over a quarter of a million dollars - annually! This is an average and some facilities in larger cities like Boston are significantly higher!
In a review of these numbers, in twenty years, the numbers nearly double. For someone in nursing care in Connecticut for a year and in a private room, the annual cost would be $166,920 this year and in 2038, a whopping $301,476!. This is an average and in some facilities in larger cities like Hartford, the costs are significantly higher.
Understanding what is covered by government programs and how to plan for them should they be needed is important. Let’s discuss some of this.
Medicare and Medicare Advantage Plans do not cover long term care. Even if you are paying high premiums for the best supplemental coverage, routine nursing home care cost reimbursements are very limited or not covered at all. In such cases, people have no other recourse than to pay for this through their own accounts or assets. A Medicaid Plan can help protect you.
As you saw in the earlier visuals, the cost of care is overwhelming. Even if you have significant assets, a lengthy stay in a facility can deplete them and eventually you may need Medicaid. What you have acquired through your life should be left to those you love. To make sure this does happen, doing a Medicaid Plan in advance can accomplish this.
Plan Before It Is Needed
Medicaid has a “five year look back” requirement which imposes a disqualification period if you have transfers of assets within the five years before applying for Medicaid coverage. Although there does exist some techniques to protect some assets if Medicaid coverage is needed in an emergency, it is better to develop a plan long before you need it.
Long-term care is a costly process and chances are most of us will be involved with this choice based on future projections, so Medicaid planning offers a more affordable alternative solution. Securing professional legal oversight when planning for Medicaid acceptance is beneficial for the following reasons:
To make sure the appropriate documents are gathered and the paperwork is completed correctly in order to avoid denial of benefits
To allow the process to go quickly and smoothly, reducing stress levels and delays in approval
To protect the financial security of the spouse
To keep limited financial assets from being used improperly
As you can well understand from the costs cited earlier and the likelihood that Americans will need these services more in the future, Medicaid planning is extremely important. Connelly Law can help you with Medicaid Planning if and when you need it. Click on the brochure below to download it and print it out. Our office is happy to answer any questions regarding this important subject. Call us at 1-855-724-9400.
Attorney Connelly practices in the area of elder law. This area of law involves Medicaid planning and asset protection advice for those individuals entering nursing homes, planning for the possibility of disability through the use of powers of attorney for the both health care and finances, guardianship, estate planning, probate and estate administration, preparation of wills, living trusts and special or supplemental needs trusts. He represents clients primarily in the states of Rhode Island, Connecticut and the Commonwealth of Massachusetts. He was certified as an Elder Law Attorney (CELA) by the National Elder Law Foundation (NELF) in 2008. Attorney Connelly is licensed to practice before the Rhode Island, Massachusetts, Connecticut, and Federal Bars.