Currently, it is estimated that 7 in 10 Americans will need some type of long-term care, with Medicaid expected to pay for two-thirds of those long-term care services.
A recent Huffington Post article entitled, Is Divorce the Best Option for Older Americans? examined how Medicaid qualification rules actually encourage divorce for married seniors who may only qualify for Medicaid as singles.
Under the rules, a married couple can only have assets of $3,000 to qualify for Medicaid. By divorcing, a couple could live together and protect the assets of the spouse not receiving Medicaid home health benefits.
The rules differ if one spouse lives in a skilled nursing facility; that spouse can usually keep a larger portion of income, but after the death of both spouses, Medicaid can then attempt to recoup long-term care costs from the estate. If the couple divorces prior to death, can avoid the estate recovery process.
Medicare currently will cover long-term expenses for those over 65 for the first 100 days of care. If you do not qualify for Medicaid (and wish to remain married), will be responsible for covering the entire cost – which is why planning for long-term care before you need it is critical. Factors to consider include:
Age. Many planning experts say the best time to obtain long-term care insurance is 20-25 years before you need it. Your premiums will be lower if you start early.
Elimination period. A majority of people choose to begin receiving their long-term care benefits once their Medicare coverage is exhausted, but you can delay the start of benefits for any length of time.
Benefit period. Many people select a five-year benefit period, since studies show the average long-term care need is 2.5 years.
Benefit amount. You will have to choose the daily benefit amount you want when you purchase your long-term care policy – the average daily cost of a private room in a skilled nursing facility was $263 in 2014 ($228 for a semi-private room), according to the 2014 New York Life Cost of Long-Term Services Report.
Inflation rider. Be sure your policy provides enough coverage to make your daily benefits sufficient when you need them years from now.
To learn more about long-term financial planning for your golden years and other elder law issues, contact a Personal Family Lawyer® today to schedule a time for us to sit down and talk about a Family Wealth Planning Session.