Many older Americans are living happy, healthy and productive lives, but no one can stay that way forever. The older we get, the more likely we are to need long-term care. In fact, some studies have estimated that 70% of Americans who live to age 65 will need some form of long-term health services in the remainder of their lives.
And long-term care can be extremely expensive. According to the AARP’s long-term care cost calculator, a private nursing home in the Buffalo area currently costs nearly $14,000 per month. Hiring round-the-clock home health aides can be more than $20,00 per month.
Many older Americans depend on the federal Medicare program to help them with their medical expenses, but Medicare does not cover most long-term care services. Some New Yorkers carry private long-term care insurance, but it often doesn’t provide enough to pay for all their needs.
Medicaid can help
Here’s where another federal program can be a life-saver. Unlike Medicare, Medicaid does pay for many long-term care services.
The problem is that Medicaid was designed for indigent people. As such, it has a strict means test. If a person has more than a certain dollar amount in income and assets, they are ineligible for Medicaid. That dollar amount is relatively low, and so many people find that they are too rich for Medicaid but cannot afford long-term care any other way.
Estate planning attorneys often help clients around this problem using a strategy known as Medicaid planning. By moving assets into a trust, people can maintain their eligibility for Medicaid while preserving property that they can pass on to their families.