Many people have saved for a lifetime in order to leave their home and their savings to their family. However, today it is not enough just to have a will, a health care proxy and a power of attorney in place to protect what you own for your family. Since everyone is living longer, it is important to have a plan in place to shelter what you have so it is not lost to home health care or nursing home costs, but goes to the ones that you love.
By making important choices early, there is a road map in place during an emergency. Most people want to stay in their homes as long as possible, and home health care assistance, while expensive, is the best option for most of us. However, when a sudden severe illness or injury makes staying at home impossible, proper planning eases the stress on family members and still provides protection for your home and your hard-earned savings.
While it is not an adequate replacement for a discussion of individual circumstances with a Westchester County estate planning and elder law attorney, this article will provide an overview of some general Medicaid and Medicare considerations. Medicaid is a safety net when an individual needs long-term care after depleting or successfully sheltering all their assets.
Long-term care can take place in one’s own home or through a nursing home, assisted living or memory care facility. Many seniors need added assistance in everyday activities, like bathing and eating, and can require assistance for years. Paying for this assistance can totally deplete a person’s life’s savings, unless proper planning is done in advance.
Medicare versus Medicaid
Medicare is the federal insurance program for those over the age of 65. Medicare has different parts that cover medical treatment and prescription medication. Medicare Part A covers care in a nursing home, inpatient hospital stays and some home health care. But Medicare at the most only covers up to 100 days. Medicare is not therefore a long-term care solution.
Medicaid eligibility, on the other hand, is only available for individuals with less than $14,800 in assets. The majority of the 1.8 million nursing home residents in the United States rely on Medicaid to cover some or all of their bills.
In a recent article, the New York Times provided an example of a retired schoolteacher in upstate New York. She depleted $300,000 of savings in six years needing in-home care and then moving to a $250-per-day nursing home. Now the 92-year-old woman, who suffers from dementia, relies on Medicaid to pay the majority of her bill. The real tragedy is that no one needs to lose all of their savings if they set up the proper plan to shelter their money and house and preserve them for their family. An elder law attorney can show you how to protect your assets and become qualified for the Medicaid program to pay your long-term care costs.
New Changes to the Medicaid Program
To reduce Medicaid costs New York has opted to use managed care plans to cut expenses. In theory, the change will allow the state to decide minimum eligibility for a limited number of managed care programs and set standards of care, rather than having the local Departments of Social Services deal with a large number of independent contractors providing care.
New York currently spends 41 percent of its Medicaid budget on long-term care. Jason Helgerson, the chief of the state’s Medicaid program would like to see a shift away from fee-for service. Managed care plans are one alternative that would set a fixed sum for lifetime care costs. Therefore, both new and current New York Medicaid applicants must now choose nursing home or home health care providers who are part of a state-approved managed care network. The new program is being rolled out state-wide over the next several years. It will become effective in Westchester County beginning January 1, 2013. Keeping people healthy and living independently for as long as possible is one goal of the new program.
Planning Ahead to Save Your Estate for Your Family
Depending on the length of time a person needs long-term care assistance, their estate can easily be depleted and there will be little to leave to loved ones or favorite charities.
Planning for the enormous expense of long-term care despite on-going changes in the Medicaid program can be challenging. A skilled New York elder law attorney can set up an individualized plan taking into account your particular family circumstances and wishes. If you plan in advance, you can protect your house and your hard-earned assets, and pass them to your family instead of using them up paying for your long-term care costs.