There are many things mature persons need to plan for. An often overlooked area which requires careful planning is potential long-term care. More than half of people sixty five and over will require some form of long-term care. The Medicare office estimates that by the year 2020 approximately twelve million people will need long-term care. The cost of health care continues to increase and government support programs are being cut. The median cost of a one year stay in a nursing home in New Jersey is approximately one hundred thousand dollars per year.
The five possible sources for payment for long term care are private payment, long term care insurance, Medicaid, Medicare and the Veterans Administration. If you are a veteran entitled to those VA benefits, if you are eligible for long term care insurance and able to afford it , or if you are able and willing to pay privately for long-term care, then perhaps you do not need to plan. However, most people do not fit into any of those three categories. The two remaining options are Medicare and Medicaid.
Medicare has specific rules and will only provide coverage up to one hundred days. The patient must be eligible for Medicare, have spent three days in a hospital and enter long term care within thirty days of the hospital stay. Medicare will cover the first twenty days of the stay, then for the next eighty days Medicare may require the patient to pay up to $144.50 per day and Medicare will cover the balance. After the first one hundred days, Medicare will stop providing coverage. Moreover, the care must qualify as “medically necessary”. Medicare will not pay for what is classified as “custodial care,” that is it will not pay the cost of general assistance with daily activities, i.e. eating, dressing, bathing, etc. The patient must require skilled nursing care. Thus, this is a very limited payment option.
Medicaid is more often utilized to pay for long term care, but there are very specific rules to qualify for Medicaid coverage. In addition to other requirements, an individual must: be a resident of the state of New Jersey; be sixty five years or older (unless blind or disabled); medically eligible; and have extremely limited income and assets. Typically, advanced planning is required to ensure the patient meets the limited income and assets requirement. Under the Medicaid “Look-Back Rule” for the transfer of assets, with the exception of certain exempt assets, any transfer of assets for less than fair market value during the five years prior to the date of Medicaid application must be reported on the application and is subject to penalty, and moreover if an asset transfer results in the imposition of a penalty, it can also be a criminal offense.
Planning and counsel are thus imperative when making provisions for the possibility of long-term care. The attorneys at McLaughlin & Nardi, LLC can assist you in making the best possible choices. Contact our New Jersey attorneys by e-mail or telephone at 973-890-0004.