How to Shield Assets before a Nursing Home Stay

Welcome

Episode 5:  Hey everybody, hope you’re staying warm out there and not slipping on any ice too much. This is Brandon Lawrence with another episode of the Protect Your Nest Podcast. It’s great to be back with you. Today. We’re going to run some numbers. I was thinking over this cold spell, I said, Hey, people want to hear numbers. They like numbers. You could put those in your head, you could write them down, you could relate to those easily. And I wanted to break things down for you to make it real, so to speak. And we’re here to talk about, of course, Medicaid and qualifying for the qualifying for nursing home Medicaid. And with that, we’ll just start with the first number.

Medicaid Statistics and Nursing Home Demographics

Medicaid in the United States is the primary payer for 63% of nursing home residents. And that’s a lot of folks. About 1.2-1.3 million people in the United States are in a nursing home facility requiring 24-hour care, medical care and assistance with their daily needs. Now, without Medicaid, many low-income seniors and people with disabilities couldn’t afford a nursing home stay. Let’s break down the myth of that you have to be destitute or have no money to qualify for Medicaid and qualify for Medicaid nursing home care. That’s absolutely not true.

You can work your whole life, get retirement, have a house and a car, and be fined financially and still have to qualify for Medicaid because these nursing homes are so doggone expensive. So, what a lot of people would like to do, whether they’re well-off or not as well-off, you want to protect the income that you have. You want to protect the assets that you have in order for you to qualify for Medicaid and receive long-term care. Because another number, the average age of a nursing home resident is 83 years old. And that’s because of course people are living longer. 73% of nursing home residents are women, who tend to live longer than men. Who knows why that is. We may know why that is. You may know personally why that is, but that’s just a statistic. And those are facts that we’ve gathered.

Another statistic, kind of a sobering statistic, 53% of nursing home residents pass away within six months of being admitted into the nursing home. The majority of people that go into a nursing home, they’re not staying in nursing homes for years and years and years. A lot of people that get admitted to nursing homes are requiring end of life care. That’s why ideally in a nursing home, you got professionals that are used to caring for people that need delicate medical care because they’re not going to be with us for too much longer. That’s just what it is. And of course, ideally families probably don’t want to have their loved one in the nursing home for extended period of time. It’s expensive. It’s taxing on you emotionally and it’s taxing on the resident emotionally as well. So everybody’s feeling the pinch of that. The nursing home stays are usually pretty short because 65% of nursing home residents stay in that nursing home for less than one year.

Nursing Home Costs Breakdown

Probably the number that you’re really concerned with is the cost.  On average, per month, for a nursing home stay, you’re going to have to pay $9,277. And that’s for a semi-private room, probably what at least another person that’s in the room and you’re separate, semi-private, everybody’s been in the hospital. Semi-private is simply a curtain that you pull back when you want to have a private conversation. But of course, the curtain doesn’t stop the voice from traveling. But that’s semi-private. It’s $10,646 per month on average for a private room. And of course this depends on the location. The cost includes 24-hour care, meals assistance, daily living. So of course your baths, a person getting you in and out of bed, whatever food that’s on the menu that particular day and the long-term care that comes with it. Nursing homes a big business in America. That’s just what it is.

America leads the world in nursing home care because in Europe, other countries, other continents, there’s not as much of a push for long-term nursing home care. And we have a different medical, insurance structural system. A lot of factors contribute to why America leads the world in nursing home care. So these are all factors that you take in consideration. And the big number is roughly, it’s about a $100,000 a year for a resident to stay in a nursing home. And that’s a lot of money. That’s more than a lot of people make. That’s more than most, probably the majority of residents in a nursing home, make per year.

Those numbers right there could probably help you paint the picture of why Medicaid is so crucial and so important. And everybody is probably, well not everybody, but a lot of people, 63% as I told you before, lean and depend on Medicaid to help them defer some of these costs that go along with the nursing home. So that gives you a picture of what the cost is. Now you probably want to know, how do I pay for this? How am I going to afford this? Well, you can afford this.

Planning and Qualification Requirements

And that’s where pre-planning comes in. Everybody knows that you got to plan for these types of things, if you are able to plan. A lot of people, if something is acute and happens quickly, then it is more difficult to plan. But if you’ve got the knowledge and you’re in touch with a person that can help you with the strategy to get ready, then you’ll be in a much better position to try to pay for these things.

So another point of information, if you’re a single person applying for Medicaid in Kentucky, there is an income limit that you have to meet in order to qualify for Medicaid for a nursing home. And that’s $2,982 per month as an income limit. So you can’t have more than $2,982 per month coming in, in order for you to qualify for Medicaid.

Another limit is an asset limit and that’s a $2,000 asset limit. You can’t have any more than $2,000 worth of assets, when you start your application for Medicaid. And you also, you must qualify and need nursing home-level care. That means it’s got to be doctor approved or doctors got to certify that, hey, this individual needs nursing home-level care ,can’t do without it. They can’t take care of themselves in a way without the assistance of a nursing home. And so those are the things for an individual.

Now, if you’re married the same income level applies monthly income level applies $2,982, but that’s per person, per spouse. Alright? You’ve got a $4,000 asset limited doubles because you’re talking about two people.  You still have to qualify what they call nursing home level care.

If you’re married and one spouse is applying for Medicaid, it goes back to the $2,982 per month, the $2,000 asset limit for the individual applicant, and there’s a $162,660 asset limit for the non-applicant spouse, meaning that the person that’s staying at home can’t have any more than $162,660 in assets. And the spouse that’s going to the nursing home still has to have to qualify for nursing-level nursing home level care. So those are some quick numbers. There are places that you can find these statistics, find this criteria. One place is at LawyerForTheCity.org. You can look on my website and you can find this criteria and these numbers that I’m talking to you about, because I know unless you’ve written them down, you probably don’t remember.  It’s a lot of numbers and they get jumbled up.

But you can look at my website and I’ve got literature.  You can contact me at Lawyerforthecity.org. We’ll send you out some literature and you can also just simply look at the website and find those numbers and facts and figures.

Asset Protection and Quality of Life Goals

So next, what you probably would want to consider would be the preparation for qualifying for Medicare. And yeah, people say, hey, what do I need a lawyer for? I can do that on my own. Sure, you can do that on your own. You could do it on your own, you could do it yourself. You could do it with a family person. You might have a lawyer in your family that does these types of things. You might have an accountant, you might have a CPA, you might have quite a few different people in your life that could help you out and they’d be willing to do that.

But if you don’t and you need some professional help, I believe that you do in doing these things, because these are very important things. You don’t want to go down a road without having a roadmap to help you out, to get to where you need to go, where you’d like to go, and ultimately where you need to go. So, a professional like me will be able to help you out and help you navigate and traverse these waters so you won’t knock yourself out of any contention for being able to qualify for nursing home Medicaid, and get the care that you need in order to live the quality of life that you’d like to. And at the same time protect your assets and not have the Medicaid people or not have the government away your assets. This is why we do it.

This is ultimately why you do it. You live a great life. You deserve a quality of care for the rest of your life. And you also want be able to alleviate the stress from your family, give them a fighting chance in this new economy and maintain your health and make sure that everything’s going to be all right when you leave this earth, and then maintain some type of semblance of control. So what my office does is provide a service to help you out with the Medicaid application. It’s not really complicated, but it’s a lot of information that you’ve got to got to do, that you’ve got to submit, in order to qualify.

It’s a timing situation.  You want to do it not too soon, not too late, because you don’t want to have to end up owing any money or take some drastic measures to be able to qualify for the Medicaid. So we can help you do that. Like I said, LawyerfortheCity.org, that’s what we do. And we’ll sit down with you, go over the application, help you fill it out and get you on the road to getting the proper care that you want and that you need. Because there are definitely ways to be able to put your assets in a place that’ll protect them because you got to.

One thing to remember is Medicaid, a lot of times, can come after assets after you pass away, which can affect, depending on your circumstance, can affect the financial future of your family.

Just because you’re qualifying, while you’re living after you pass away, they still could possibly have a right to some of your assets, meaning your main asset, which will be your home. But if you do certain things and make certain provisions, you’ll be able to protect those particular assets.

Say for instance, I know you’ve heard of trusts, we can help you get into a Medicaid asset protection trust that can hold your assets like your home investments and things of that nature. Put those in trust. Now of course, you wouldn’t be able to benefit from the principle of any of those investments, but you would be able to receive some interest from those investments and you’d be able to stay in your home. Of course, you wouldn’t be able to sell it for a profit, but you’d be able to maintain your home while you qualify for Medicaid and are going to ultimately go into a nursing home facility.

Now you’ve got a whole lot of different options like memory care, you’ve got in-home care, which you also can qualify for Medicaid to be able to take advantage of those services.  A lot of times the in-home care is just as expensive as going to a Medicaid nursing home. And then also, you can qualify for the Medicaid possibly while you wait for a Medicaid bed to open at the nursing home facility, because a lot of these facilities have a limited amount of Medicaid beds because some people actually have the finances to self-pay and some have started the process earlier and they’ve gotten in the bed prior to you. And while you wait, you’ll be able to qualify.

Five-Year Look-Back Period

That brings up, of course, the phrase that everybody knows:  the five year look-back.  You have to start this process prior to five years prior, at least, before you’re able to qualify for Medicaid to go into a nursing home facility.

So, otherwise you would owe some money to the government.  Whatever shortcoming that you have for qualification, you would have to owe a percentage of that money to the government to make up the difference for your stay at the actual nursing home. Because these nursing homes are costing now, on average, you’re going close to $20,000 per year for a nursing home stay. That’s dependent upon where in the country that you live.

Conclusion

So, these are important things that you want to get ahead of. And a professional like myself can help you go in the right direction, save you some money, save you some heartache, and get you qualified for Medicaid, in order to stay in a proper facility with professional people that are going to give you the quality of care that you need and that your money is going to buy along with the assistance of the government.

Because of course, you’ve worked your whole life and you deserve some dignity when you need a place to stay and someone to help you out when you need it. So hopefully, we’ll get into some future ways to help you save and qualify and get prepared for the qualification of Medicaid, if in fact you have to go into a nursing home, and give you that information for preparation in the future. But until then, we wish you a great time. Stay warm and thank you for listening to the Protecting Nest Podcast with the lawyer for the city, Brandon Lawrence. Let’s talk it over.