Long Term Care Planning FAQ

Click on any question to view its answer.

  • Q: How much does a nursing home cost?

    A: The cost of a nursing home varies between geographic regions and depends largely on the type of care required. A good estimate would place the average cost somewhere between $6,000 and $8,000 per month. These costs are consistently increasing over time.

  • Q: How will I pay for the cost of nursing home stay?

    A: There are three basic choices:

    1. Use your personal assets to pay the cost
    2. If you have a long-term care insurance policy, the insurance would cover some, if not all of the cost
    3. Qualify for Medicaid and have the government subsidize your stay

  • Q: Will Medicare cover the cost of a nursing home?

    A: Medicare only provides a limited amount of coverage, and only under certain circumstances. Medicare does not cover custodial care in a nursing home, only rehabilitative care. If an individual is in the nursing home and is rehabilitating, Medicare will cover the full cost for the first 20 days, and then part of the cost for the next 80 days. After that, the individual is responsible for the full amount of the monthly cost.

  • Q: What is long term care insurance?

    A: Long-term care insurance is an insurance product that is designed to pay some or all of the policyholder’s long-term care expenses. These expenses can include home health care, assisted living, community-based residential facilites and nursing homes. Policies have become increasingly customized, so it is important to discuss your situation with a long-term care insurance specialist.

  • Q: Is it advisable to give assets away to my children?

    A: The key to proper estate planning is to keep as much control of your life and your assets as possible. By giving assets away to your children, you’ve not only lost control of your assets, but those assets are now vulnerable if a child gets divorced, is involved in a lawsuit, or dies. Assets should only be given to children if it is part of a plan that is carefully crafted by a qualified elder law attorney with your particular life situation in mind.

  • Q: What is Medicaid and how do I qualify?

    A: Medicaid is a combined federal and state program that provides funds for long-term care expenses for those with limited income and resources. In order to qualify, an individual must have monthly income that is less than their long-term care expenses. In addition, the applicant must have few or no assets. For single individuals, the amount of non-exempt resources must be less than $2,000. For married couples, the applicant must be below $2,000, but the spouse can typically keep anywhere from $50,000 to $110,000. There are certain exempt assets that are not counted when determining the amount of assets. These assets include the family residence, personal belongings, certain vehicles, burial assets and a small amount of life insurance.

  • Q: Can I give assets away and still qualify for Medicaid?

    A: Giving assets away in order to reduce them to the size of the applicant’s estate qualifying levels is frowned upon by the government entities that fund the Medicaid Program. Therefore, on the Medicaid application, the applicant is asked to disclose any gifts made within the prior 60 months (“lookback period”). If any gifts were made during this period, there is a penalty period imposed that is calculated based on the total value of assets given away during the period. Remember: The larger the amount of the gift, the longer the penalty period. During the penalty period, the applicant will be expected to pay for long-term expenses from other sources. The goal of the lookback period and the penalty period is to discourage and eliminate any gifts made with the intention of qualifying for Medicaid benefits.