Becoming a senior has perks but it also means that your health starts to fail and you may not be able to stay in your own home and require full-time care. There are many steps required to move into a nursing home. Hopefully, this article will be able to address and answer many of your questions and concerns.
What is the difference between Nursing Homes and Assisted Living Communities
Residents in a nursing home require full-time care, medical assistance, and monitoring. They typically have some type of disability and serious health conditions that require the assistance of a skilled nurse, therapist, and other medical care services.
Residents in an assisted living community generally only require supportive care. For example, a person with Alzheimer’s who is not safe living alone or a senior who needs assistance with one or more activities of daily living, such as eating, bathing, dressing, etc.
As more and more seniors are living longer, many more seniors are unable to stay in their own homes and require full-time assistance provided by a nursing home or assisted living facility. According to ncbi.nlm.nih.gov, there are approximately a 1.5million seniors living in nursing homes in the U.S. The question now becomes, how do you pay for the care you now need? The system can be difficult to navigate but there is support available that will help you get the best care for your situation.
Medicare is health insurance that people can qualify for when they are 65 years old or are disabled with at least ten years of work history. Medicaid is secondary insurance to Medicare that you qualify for based on your income and assets. The qualification for Medicaid varies from state to state, so check with your state or other resources such as the American Council on Aging for information about what is covered under your state’s Medicaid program. (medicaidplanningassistance.org).
Medicare does not pay for you to be in a nursing home. Medicaid can be based on your eligibility. The life insurance death benefit that comes with your Medicare does not cover nursing home care either but if you have long-term care insurance it will cover all or part of the cost. It can be difficult to understand which insurance covers assisted or nursing home costs, so enlist the help of a trusted friend, relative, or even a social worker to help you understand it all. When your senior loved one needs to go into a long-term nursing care facility, you will need to apply for Medicaid for them if they do not already have it. Medicaid approval is basically based on income and assets the person has. You will need to bring proof of income; six months’ worth of checking account statements and proof of Medicare and prescription drug costs a month. They will usually take those costs of the monthly income. Most states allow you to have $2,000 in a savings account. The monthly income that you get from Social Security will be used to cover the costs of you residing in the nursing home. You are allowed a monthly allowance that varies from state to state and nursing home to nursing home. Your monthly allowance is what you use to buy items that the facilities do not provide.
If you are still married and one of you has to go into a nursing home, you both are allowed to spend your money to pay off existing debts, prepay taxes, pay for your insurance, funeral expenses, and any other large bill before you qualify for Medicaid health insurance. Any amount of money that is left over, the spouse that is not going into the nursing home, gets to keep half of it. The other half will have to go towards bills to get your asset total to $2,000. This will help you to qualify for Medicaid in your state and you will not have to pay the daily cost of $400 to $500 to be in a nursing home. The only plus side to paying for the nursing home yourself is that you can have a private room. While it may feel fancy, it will be costly. Once you have spent down your asset balance to $2,000, Medicaid will cover you but you will be moved out of your private room to one you will share with a roommate. This change varies from a nursing home to a nursing home and special circumstances can arise that would prevent it, like a contagious disease of some sort.
One way around having to spend all of your money is to place it into an IRA account or give it to your children or grandchildren. The plus side is that these actions may protect your money during your lifetime. On the downside, your IRA could be claimed to pay back Medicaid after you pass and the government still considers your financial gift to your family members yours for five years.
To avoid having to spend down your money entirely, check your life insurance policy. Some policy’s offer long-term care insurance that is an add-on to your life insurance policy. This additional coverage will cover the cost of a long-term care facility. Some policies will have deductibles that you will be responsible for and they will cover you for different lengths of time.
Another option is to sell your life insurance policy through a life settlement, for a lump-sum cash payout. You can use the money however you like. This can pay for your nursing care with no burden of expenses on your family. Life settlement cash payouts are typically higher than your policy’s cash surrender value but less than the total death benefit of the policy. You can find out the value of your policy for free using the free estimate calculator at mrefinance.com/free-life-settlement-calculator
The decisions are ultimately yours to make. Make sure you get everything explained to you thoroughly and make the choice that is right for you and your situation. Don’t be afraid to ask questions. If you don’t understand something, ask for more clarification.