Elder law lawyers help clients address the eventualities of aging, and these attorneys are going to be busy over the coming years. People that were born between 1946 and 1964 are referred to as “baby boomers.” An unprecedented number of babies were born during this interim, and now they are attaining senior citizen status. In fact, the Social Security Administration is accepting about 10,000 applications for benefits every day, and this volume is expected to persist into the foreseeable future.
There are a number of different legal matters that are relevant to senior citizens, but there is one that is firmly embedded at the top of the list. If you have contributed into the program sufficiently over the years, you will qualify for Medicare coverage when you reach the age of 65 under currently existing guidelines. This will provide a health insurance safety net, but there is a very significant gap in the coverage.
Medicare will pay for convalescent care, but it does not pay for custodial care, which is also commonly referred to as long term care. This is the type of assistance that you would receive from caregivers, in an assisted living community and even sometimes in a skilled nursing facility. The United States Department of Health and Human Services tells us that the majority of seniors will need help with what are called activities of daily living at some point in time. In fact, the figure is an eye-catching 70 percent, so this is relevant to all of us. Activities of daily living include feeding, bathing and other hygiene, toileting, getting dressed, assistance with getting in and out of a chair or bed, transportation, and medicine management.
If you have to pay for an extended stay in a nursing home or assisted living community out of your own pockets, it is not going to be a very comfortable exercise unless you have very deep ones. Genworth Financial conducts ongoing research into the state of long-term care costs around the country, and they also drill down state-by-state and city-by-city.
Our office is located in Riverside, California. According to the California Department of Health Services, the average cost of a nursing home in 2018 is approaching $9,000 per month. Assisted living facilities in the Inland Empire range from $3,500 per month to as much as $7,000 per month, depending on the level of care needed. When I was paying for caregivers for both of my parents in their home in Riverside, there was a period of time it was costing me close to $10,000 per month for 24 hour care for the both of them. As you can see, the cost of law term care can be overwhelming.
This is the bad news that elder law attorneys have to give their clients on a daily basis, but there is also some light at the end of the tunnel. Medi-Cal is a jointly administered federal/state government program that provides health insurance for individuals that have very limited financial resources. The Medi-Cal program will pay for long-term care, and in fact, a significant percentage of elders in California nursing homes are relying on Long Term Care Medi-Cal to assist with the costs. Many of these people qualified for this program by consulting with an elder law attorney and planning ahead for the potential need for Long Term Care Medi-Cal benefits to pay for nursing home expenses.
To qualify for Medi-Cal to pay for Long Term care, the value of your countable assets cannot exceed $2000 in you are an unmarried individual. The limit for married couples is higher. Fortunately, your residence is not considered to be a countable asset. Other assets that don’t count towards the resource limit are one vehicle, furniture and furnishings in your residence, individual retirement accounts (if minimum distribution required by the IRS are being taken), clothing, jewelry, a prepaid burial policy, and unlimited term life insurance and a whole life insurance policy with no more than $1,500 cash value.
There are also income limits, which if exceeded, would result in a share of cost being paid to the nursing home. Again, the rules are different for married and unmarried individuals. If you have excess countable resources there are many strategies that can be employed to gain eligibility for Long Term Care Medi-Cal eligibility. Planning options vary from individual to individual, depending on marital status, income, and the type of assets owned – such as annuities, certificates of deposit, stocks, bonds, and real estate other than your personal residence.
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Elder law lawyers help people devise strategies that lead to Medi-Cal eligibility at the right time. Each case is different, so personalized attention is key. If you would like to speak with us about this matter or any other estate planning or elder law concern that you may have, give us a call at 951-888-1460 to schedule an initial consultation or visit our website.
Have a question? Ask Dennis.