Everyone is well aware of the fact that you have to take financial steps in advance to be able to enjoy your active retirement years in comfort. However, many if not most of the same people make no preparations for the twilight years that will follow.
You may be surprised to hear that seven out of every 10 senior citizens will require help with their activities of daily living at some point in time. Some of these folks will be able to receive the assistance that they need from family members and friends that will do it for free.
However, 52 percent of elders will eventually receive paid care according to the United States Department of Health and Human Services. This is a sobering statistic, and it underscores why you should take the matter seriously.
You may assume that Medicare will cover these expenses since most seniors will need paid care and it is a health insurance program for older Americans. Unfortunately, whether it is fair or not, Medicare will not pay for the custodial care that nursing facilities provide.
Aging in Place
There is a building concept called aging in place, and it involves the modification of existing spaces to match mobility challenges. You can engage one of these contractors to alter your home in certain ways to make it easier for you to go about your daily tasks.
Possible modifications include installation of grab bars, handrails, motion sensor lighting, door levers instead of knobs, slip resistant flooring, motion activated faucets, and the list goes on and on.
As your needs change over the years, more adjustments can be made, so this is an ongoing, holistic process. Sometimes adult children will act as caregivers in their own homes and aging in place modifications can facilitate a smooth transition.
Clearly, staying at home or in the home of a child caregiver can be preferable to full-time residence in an assisted living facility or nursing home. However, when a professional level of care is needed, the cost factor will enter the picture.
Medicare will not pay for an in-home health aide, but there is a Community Medicaid program in New York that will cover this type of assistance. You have to be eligible for Medicaid to qualify for this program.
This is a health insurance program for people with very limited resources, so there is a $15,900 asset limit in New York in 2021. The good news is that your home is not a countable asset with $906,000 equity limit.
However, there is a Medicaid estate recovery mandate. If you qualify for Medicaid or Community Medicaid as a homeowner, the program can put a lien on the property after your death.
Medicaid Trust and the 30-Month Look Back Period
You could fund an irrevocable trust with your home and income-producing assets with Medicaid eligibility in mind. While you are living independently, you could receive distributions of the trust’s earnings, but you would no longer have access to the principal.
Since the home would not be in your personal possession, Medicaid would never be able to attach it.
The principal would not count if you apply for Medicaid, but there is a look back period to take into consideration. For Medicaid coverage, it is five years, so you would have to wait five years after funding the trust to become eligible for Medicaid.
At the time of this writing, there is no look back period for Community Medicaid. However, in 2020, a 30 month look back was installed. It is supposed to be in effect by now, but enactment has been delayed because of a provision in the Family First Cares Act.
The implementation of the look back has been pushed back until at least April of 2022, and this may not be the last extension. Clearly, now is the time to act if you can prove that you need in-home care.
Schedule a Consultation Today!
We can help you implement a custom crafted plan for aging that will address long-term care costs. If you are ready to get started, you can schedule a consultation at our Smithtown, NY elder care planning office if you call us at 631-265-0599.
There is also a contact form on this site you can use to send us a message, and if you reach out electronically, you will receive a prompt response.