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The average stay in a nursing home is a little over two years.  The cost to stay in these facilities varies but can be as much as $250.00 per day.  If you multiply that by 365 days in a year, that is $91,250.00 per year.  If the average stay in a nursing home is over two years, it is possible that you or a loved one could spend over $180,000.00 on room and board alone.   

Right about now, many readers are thinking about their net worth and how far it might stretch out over a two year stay in a nursing home.  Many realize that while they have worked and saved their whole lives, they do not have enough to absorb this cost.  The question then becomes, who pays?

Medicaid is a joint federal and state program and for many Americans becomes the payer of their long term skilled care nursing home costs.   Medicaid is a means based program which means that if you have too much money, you will not qualify.  Many people spend every last dime on their long term care costs and then apply for Medicaid when they no longer have the ability to pay themselves; however, it is not a requirement that you go broke before accessing Medicaid.  

Whether you are single or married there are methods that, if implemented correctly, can save you and your family thousands of dollars in nursing home costs.

First, if you are married and you find that your spouse requires long term skilled care in a nursing facility, please find an Elder Law Attorney that will take the time to explain to you that it is not necessary for you to spend every last dime of your hard earned money before accessing Medicaid.  In fact, there are specific rules that apply to your case and can save most of your money should your spouse enter a nursing home. 

Secondly, if you are a single individual, it is possible to preserve about half of your savings and still qualify for Medicaid.  By utilizing certain transfer techniques, it is possible to access Medicaid while leaving some of your money to pay for things that Medicaid will not cover and then ultimately leave an inheritance for your children and grand-children.  In either case, it is important for you to obtain competent legal advice before engaging in this type of planning.

If we have five years to work with, there is a potential to protect a large portion of your assets.  Generally, this type of pre-plan utilizes an Irrevocable Trust.  Any property transferred into a certain type of trust for five years will be beyond the current look back period for Medicaid.  This means that you will not have to disclose the transfer of this property to Medicaid at the time of your application.  Pre-planning with a trust is a complicated process and requires an experienced professional.

Medicaid cases vary in difficulty and we are often asked whether or not our services are needed for relatively simple cases.  In most cases, the prudent answer would be “yes.”  The social worker at your mother’s nursing home assigned to assist in preparing a Medicaid application for your mother knows a lot about the program, but maybe not the particular rule that applies in your case or the newest changes in the law.  In addition, by the time you are applying for Medicaid, you may have missed out on significant planning opportunities.

The best bet is to consult with a qualified professional who can advise you on the entire situation.  At the very least, the time invested in the consultation should provide some piece of mind.  And what you learn can mean significant financial savings or better care for you or your loved one.  As described above, this may involve the use of trusts, transfers of assets, purchase of annuities, or increases income and resource allowances for the healthy spouse.

If you are going to consult with a qualified professional, the sooner the better.  If you wait, it may be too late to take steps available to preserve your assets. 

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