Although no one really wants to think about the possibility of ending up in a nursing home at some point in time, the odds are favorable for all of us – and the increase dramatically the longer you live. Ignoring the possibility that you may one day need nursing home care could be an extremely costly mistake because it means you will likely fail to include Medicaid planning in your overall estate plan. Unless you can afford to cover nursing home costs out of pocket, something that very few of us can do, you will likely need to depend on the Medicaid program for help. Unless you plan ahead, however, you may not qualify for North Carolina Medicaid benefits. That, in turn, will likely put the nest egg you have managed to set aside at risk. The best way to avoid putting your assets at risk is to include Medicaid planning in your comprehensive estate plan now.
Will You Need Nursing Home Care?
We all want to believe that we will escape the need for nursing home care and, instead, live out the end of our lives in our own home. The reality, however, is that we all stand a fairly good chance of needing long-term care eventually if we live long enough. Consider some sobering statistics related to the need for long-term care:
- The lifetime probability of becoming disabled in at least two activities of daily living or of being cognitively impaired is 68 percent for people age 65 and older.
- By 2050, the number of individuals using paid long-term care services in any setting will likely double from the 13 million using services in 2000, to 27 million people.
- Among the population aged 65 and older, 69 percent will develop disabilities before they die, and 35 percent will eventually enter a nursing home.
The Cost of Nursing Home Care in North Carolina
If you have never considered the cost of nursing home care before, now is the time to do so. Nationwide, it costs, on average, about $80,000 to spend a year in long-term care. North Carolina nursing home costs are about on par with the national average or slightly higher for a private room. The average stay in a nursing home is 2.5 years, putting the average total cost for a nursing home stay at around $200,000.
Why Medicaid Eligibility Is Important
What does all of this have to do with Medicaid, you may be wondering. Medicaid eligibility becomes important for many seniors because it is often the only option for help paying for nursing home care. What about your basic health insurance policy? Most basic health insurance policies do not cover long-term care costs unless you purchased a separate long-term care rider and paid a separate premium for the coverage. Won’t Medicare help? Unfortunately, Medicare only covers long-term care costs under very specific circumstances – and even then only for a very short period of time. For over half of all seniors, Medicaid becomes the only option because the Medicaid program does cover nursing home expenses for eligible program participants.
Qualifying for North Carolina Medicaid
The good news is that the North Carolina Medicaid program can help. The bad news is that qualifying can be tricky for an applicant who failed to plan ahead. Medicaid has both income and asset limits that cannot be exceeded by an applicant. As a retiree on a fixed income the income limit may not be a problem, but with a “countable resources” limit of just $2,000 the asset limit could prevent you from qualifying for benefits. Because Medicaid employs a five-year “look-back” rule that reviews your finances during that five years leading up to your application and effectively ignores any asset transfers made during that time period, meaning the value of the transfer is imputed back into your estate for the purpose of determining eligibility. If your assets exceed the program limit you will be expected to rely on those assets until the value of your countable resources diminishes to the point where you qualify for benefits.
Understandably, no one wants to watch their hard-earned assets disappear as payment for nursing home expenses. The best way to ensure that this doesn’t happen to you is to include Medicaid planning in your overall estate plan early on in your life.
If you have additional questions about Medicaid eligibility and/or Medicaid planning in the State of North Carolina contact the experienced Medicaid attorney at The Law Offices of Cheryl David by calling 336-547-9999 to schedule an appointment.