No one looks forward to requiring the services of a nursing home or assisted living facility. Nursing home costs run upward from $45,000 per year. Better quality facilities, the kind that I would prefer for my family, generally cost upward of $60,000 per year. High end facilities cost $100,000 per year.
Medicare does not pay for nursing facilities unless the patient is recovering. Medicare nursing home coverage, if it applies, is for only 100 days. The patient has substantial co-pays.
Should you need care there is a tremendous mental and emotional burden in accepting that reality – that is enough reality without having to confront that reality of who is going to pay and what will happen to the well spouse.
Medicaid is not the best way to deal with the risk that nursing care becomes our reality. Medicaid requires that you spend down your assets (pay for care until broke or below spend-down limits) and participate in the ongoing cost of care (pay a share of the monthly expense with your pension and social security). Aside from impoverishing yourself, use of Medicaid often results in impoverishing the well spouse – called the “community spouse.”
If you have no other option and Medicaid becomes your reality, there are ways to manage it that reduce the often drastic effects on the community spouse. But, the best way to minimize the mental and emotion risks of nursing home care or expensive assisted living care is to insure – if you are reasonably healthy and if you can afford it. Economical insurance can be purchased to pay for at-home care. More expensive policies will pay for assisted living and nursing home care. With insurance you can choose an institution that you prefer. With Medicaid that option may not exist. A facility does not have to take welfare cases. In facilities that do, beds are often limited in number.
If you cannot afford insurance, or don’t qualify because you waited too long, and/or don’t have the money to pay for care yourself, Medicaid is available. Options are more limited for the Medicaid spouse; however, the law allows certain protection for the well spouse, that is, the “community spouse.” The community spouse can stay in the family home, enjoy a certain level of income from the Medicaid spouse (depending on other income factors) and keep income that is paid to that (the community) spouse. Also, cash assets can be placed in certain exempt resources – the most important being a Medicaid qualified annuity. The annuity allows the well spouse to enjoy the principal and interest of the income.
Planning is key. Regardless of our circumstances, we should plan. Planning requires looking at the risk, analyzing the options according to our economic and social circumstances and making decisions. Through planning and use of various economic devices such as Testamentary Special Needs Trusts, exempt assets and other options the law provides, should the reality of a nursing home or intensive assisted living care be necessary, you can ensure a high level of care and economic protection for yourself and your well spouse. In some cases, planning can even allow you to give a cash legacy to your family.
Timothy Acker works with families who are caring for the elderly in Bonney Lake, Sumner and Enumclaw. He is a member of the Washington State Bar Association with a practice in Gig Harbor, Wash.