Planning Ahead – How to Save Your Nest Egg From Nursing-home Costs
May 25, 2009
You have spent the majority of your life working and building your nest egg so that your retirement will be well funded. Unfortunately, retirement comes at a time when the possibility of catastrophic illness is more likely.
Of all Americans aged 65 or older, approximately 43% will enter a nursing home during their lifetime. Given that the average yearly cost of nursing home care is $90,000, and that the average stay will last 2 ½ years, planning for long term care costs is crucial, as these costs will deplete your nest egg at an alarming rate. Planning ahead, which is planning several years prior to nursing home admission, will mean the difference between spending your nest egg to finance your care and preserving your nest egg for your family.
Long term nursing home care is not paid for by Medicare or Medicare Supplemental Insurance. While Medicare may provide benefits for a short time period, once Medicare benefits end, the nursing home resident must find another source of payment. Medicaid benefits are available to help pay for nursing home care, but they are only available once eligibility requirements, which include strict asset limits, have been met.
Recent changes in Medicaid law have significantly reduced last minute asset protection opportunities. While there are still a few beneficial options available if you fail to plan ahead, they apply only in very specific situations and are much less fruitful than plans completed several years in advance. The only surefire way to maximize the assets protected for your family is to begin planning at least five (5) years prior to a nursing home admission.
Obtaining long term care insurance can alleviate the draining of assets and provide increased financial stability. Most long term care insurance policies will pay for long term nursing home care, although some only pay benefits for home care. Benefits are paid according to what is specified in the contract purchased.
A wide range of policies is available, …
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by: Gina M. Barry, Esq.
BusinessWest, Healthcare News
May 25, 2009, June 2009