While many plan for their retirement income needs, they may not focus on potential medical expenses as well.
Medical needs tend to increase with age, making appropriate insurance coverage ever more important.
For those age 65 and over, Medicare covers many medical situations, but coverage for nursing home care is available only on a short-term basis and usually only following a hospital stay.
Medicaid is an alternative for nursing home and other long-term care costs but generally provides coverage only for those who have assets of $2,000 or less. Also, the patient must meet specific medical requirements for Medicaid to apply.
When facing nursing home costs, many find that their personal assets and resources will not be enough. Making sure that the spouse of the nursing home patient will have sufficient income and assets is also important.
Long-term care coverage through an insurance company is one way to handle these costs, but coverage should be secured while a person is in his or her 50s or early 60s when the cost is most economical and to avoid medical ineligibility for the insurance.
The policy's terms should be carefully selected. Consideration of both in-home services and nursing home coverage can extend the time a person can remain in the home.
To qualify for Medicaid, some decide to transfer some or most of their assets to an irrevocable trust that can benefit family members also. Under federal law, the transfers must occur at least five years before the person is admitted to the nursing home.
When a trust is not appropriate, the couple or individual will likely be required to spend the majority of their own assets to reach the asset level needed for Medicaid coverage. Certain things, such as a home and automobile, are exempt from the calculation of what must be spent or transferred to the spouse who is not in the nursing home.
U. S. wartime military veterans and spouses can receive a special monthly benefit for unreimbursed medical expenses when in a long-term care facility or receiving in-home care. The current benefit of up to $2,000 usually cannot cover the full cost of care, but is a helpful supplement.
These protective measures can be complex and are best handled through working with an Elderlaw attorney to avoid costly mistakes.
Deborah Miller, JD is the director of planned giving for the West Virginia University Foundation Inc.