Nursing Home Planning

If you're 40 years old and healthy, it is very easy andEveryone is entitled to the Medicaid program under the
inexpensive to purchase Long-Term-Care Insurance.right circum¬stances. Proper advance planning is
All of you should purchase it now. Unfortunately, not allnecessary to assure those "right" circumstances and
of us are so lucky to 40 and healthy. What are thosepreserve your hard earned as¬sets. Too much of
of us that are in our 50's, 60's, 70's and older to dothe following as¬sets will keep you from qualifying:
about long-term-care, especially if we have badcash, stocks, bonds, IRA's, CD's, real estate, cash value
health? LTC Insurance is impossible to purchase if welife insurance, second homes, etc. A single person is
are too old or too diseased. What are those of us toallowed up to $2,000 in cash, a primary residence and
do about paying for long-term-care, when it becomesper¬sonal items. An at-home spouse is allowed a
necessary? I am in that position and have been forcedmaximum of $101,640 in cash (Effective 1-1-07), a
to learn everything possible about this situation in orderprimary residence and personal items. These amounts
to be as prepared as I could be. If you are like me, thismay differ from state to state. In most states, the
may be important too you, too.at-home spouse may have either considerable or
My research found dozens of government and privateeven unlimited income when structured properly.
sites trying to explain how to pay for LTC. TheIn order to qualify, many people choose to "gift" assets
following items became obvious and verifiable fromaway. Assets can¬not be given away within 60
those websites.months (currently 30 months in California, 36 months in
Many seniors find themselves facing nursing homeseveral other states and 60 months as required by
care costing over $50,000 per year. The costs rangeThe Deficit Reduction Act of 2005) of qualifying for
from just under $50,000 to over $120,000 in moreMedicaid. Before "gifting," be certain of how the latest
cosmopolitan areas such as New York City. Thesechanges have affected your State's Medicaid Rules.
costs can be devastating for most senior citizens andPlease be certain to obtain necessary legal or
their families. It seemed obvious that payment of theseprofessional advice.
amounts was eventually going to lead to some sort ofWhen either spouse needs long-term-care, assets that
govt. program. How many LTC patients or theirneed to be protected can be changed in form e.g.
families were actually going to have the funds withfrom cash to life insurance (with no cash value); and
which to pay? Payments were narrowed down toeven a business owned by the LTC patient or in some
only four possibilities: 1) The family; 2) Medicaid; 3)cases rental income in the LTC patient's name.
Veterans programs; or, 4) Long-Term-Care (LTC)Several of these items are next to impossible due to
Health insurance. Since very few seniors have LTCfamily structure or individual state's Medicaid provisions.
Health insurance, virtually all nursing home expenses willThe in¬come paid out to the at-home spouse is
be paid by Medicaid and/or the family. Veterans of aunlim¬ited in some states and limited in others. In the
time of conflict have a special program available tocase of the "unlimited in¬come" states, the
them. I give two sources of information below thatcon¬tri¬bution to the long term care facility by
helped me the most with the information necessarythe family would be any retirement income paid in the
for Nursing Home (LTC) Planning.name of the spouse needing the care, such as social
What is Medicaid? Medicaid (Medi-Cal in California) issecurity. In the "limited income" states, when the limit is
an entitlement program created by the Social Securityreached, the remaining income of the at-home spouse,
Act, Title XIX. It is the primary provider ofin addition to the income of the spouse needing the
long-term-care benefits for senior citizens today. Manycare would be the family's contribution to the care
seniors believe they can look to Medicare to pay forfacility. Medicaid would pay the difference, thereby
nursing homes. However, Medicare only pays up toconserving your estate for your spouse or your
100 days for particular types of long-term-care.beneficiary. New rules today regarding reimbursement
Medicaid is often needed after that period is over.of the State for any Medicaid expenses are now
Medicaid benefits have become the premier safetybeing adopted in several states.
net for most seniors. Financial and estate plannersI have found two websites that seem to be the most
should not overlook Medicaid planning to protect andknowledgeable about Nursing Home Medicaid Planning.
preserve the assets of their senior clients. SomeThe first is Barry Rahm Insurance. You can reach
people think it is improper or unethical to use Medicaid.Barry Rahm at or 800-255-1932. After speaking with
This is not true. The rich rarely use Medicaid to saveMr. Rahm, he may be the best person I have located
money. An April, 2006 report titled "Medicaid and the(and the easiest with whom to get in touch) in order to
Uninsured," the Kaiser Family Foundation details thatanswer questions and help to get Medicaid qualified
the median amount transferred from a Medicaidthe fastest. The second is Medicaid Asset Protection
recipient to anyone else, including spousal transfers,Plan. They can be contacted at or 866-334-2243.
was less than $2,800. Of course, they also reportedThey are also extremely knowledgeable and charge
there were transfers made for amounts over$342.00 (including postage for overnight shipping) to
$200,000 albeit only 5 percent of transfers wereget you the information needed for Medicaid
above $50,000. They concluded that the transfer ofQualification.
assets in order to gain Medicaid eligibility is grosslyI must credit both the above sites for much of the
over-exaggerated.language and facts reported here.