Medicaid 101 is a series of blogs that Baratta, Russell & Baratta has written to provide you with information on one of the most difficult problems facing the elderly today– Medicaid and Long-Term Care expenses (LTC). In this 1st blog, we introduce you to the Medicaid program and its importance to LTC.
About 1.5 million people live in U.S. nursing homes according to the Centers for Disease Control and Prevention. More than 10 million Americans – mostly people 65 or older – need LTC services and support to help them with daily activities according to the Kaiser Family Foundation.
There are 5 ways to pay for LTC:
- Use Your Own Money – The first way to pay for LTC (or the cost of a nursing home) is to use your own money. With the average cost of a private room in a nursing home in Pennsylvania at $121,000* you can understand that an estate quickly be depleted for an individual or a married couple. The yearly average can also vary greatly, and is guaranteed to increase each year.
- Long-Term Care Insurance – This insurance is fairly expensive, and that is the case for younger individuals who seek LTC insurance. Beyond a certain age, LTC coverage becomes prohibitively expensive. Furthermore, securing this insurance is like throwing a dart at a dart board. Some people will pay for it and never use it and others who need it typically do not secure sufficient coverage.
- Medicare Benefits – Medicare is a federal health insurance program that pays for a variety of health care expenses. But benefits are limited. The program covers individuals until there is a “recovery” from the ailment or surgery (a perfect example is a knee replacement). The program does not cover a stay of any length in a nursing home.
- Veteran’s Benefits – Veterans are eligible for a range of LTC services and medical care. When our client is a Veteran, we review the many benefits available to that individual for under the Veteran’s Aid and Attendance benefit.
- Medicaid – Medicaid is a federal and state program that provides health coverage for individuals with limited income and assets. Medicaid provides support to approximately 65% of nursing home residents according to AARP. Medicaid is the primary means by which Americans pay for their LTC expenses.
Understanding how Medicaid works is critical to an individual planning for their LTC as well as individuals who are planning their estate. This blog and the following blogs in our Medicaid 101 series are designed to simplify and explain coverage and eligibility for Medicaid.
Good planning necessitates an understanding of the Medicaid law and documents which provide optionality for a client. Baratta, Russell & Baratta (BRB) understands Medicaid and we are able to advise you on options and draft optionality into your estate plan.
We would welcome the opportunity to discuss your estate plan needs with you. Please feel free to call Ken Russell, Esquire at 215-914-2222 to schedule an appointment.