Long Term Care Planning
If you are like most people I meet, you have worked and saved for many years. Whether you are retired, or planning your retirement, you want to make sure you have enough money. Enough to live on comfortably, and enough to pass on to your descendants. One of the major obstacles to this plan is the cost of long term care. Health care costs are beyond anything we could ever have imagined. When you or a loved one is faced with a major illness or a physical or mental incapacity, it is natural to be concerned about the costs. Many of my clients are confused about Medicare and Medicaid. Perhaps the government should have used different titles!
MEDICARE is a federal, age-eligible program (usually 65), without income limitations. Medicare is also available for certain disabled individuals receiving public benefits who fall under the age limitation. During your employment history, you have paid countless dollars in Social Security taxes. Those taxes pay into the program which supports Medicare. Medicare has four parts, Part A, Part B, Part C and Part D. Medicare Part A is generally for hospitalization, Part B generally covers physician visits, lab testing and emergency room visits. Part C operates similar to supplemental insurance policies to cover certain services not covered by Part A and B. Part D is for prescription coverage. Recipients of Medicare pay deductibles and monthly premiums. Generally, to qualify for Medicare, you must be receiving either Social Security Retirement benefits or Social Security Disability benefits.
MEDICAID is a federal, local and state program serving those in financial need who meet the income and resource levels. The limits vary depending on how many people are in the household. There is no minimum or maximum age limit for Medicaid. Although there is some federal involvement through guidelines, each state manages their Medicaid program. The income and resource limits are different in every state, and are usually adjusted each year. In New York, there are two types of Medicaid for long term care. There is Community Medicaid, which helps those who can remain at home, by delivering Medicaid funded services into the home. There is also Skilled Nursing Medicaid, or Nursing Home Medicaid for those individuals who meet the income and resource Medicaid tests and are a resident of a nursing home. If you are eligible for Medicaid, it will cover hospital visits, emergency room visits, physician appointments, tests, lab work and prescriptions. To qualify for Medicaid, you generally apply through the Department of Social Services in your county if you are in New York. There are many documents necessary to demonstrate your eligibility for Medicaid. If you are applying for Community Medicaid, the income and resource limits are generally higher, and the five year “look back” or penalty period for the transfer of assets does not apply. If you are applying for Skilled Nursing/Nursing Home Medicaid, the application will require five years of records for every asset you own, or any asset transferred within five years. You must also provide documents related to your residence, whether owned or rented, your other health insurance plans, your vehicles, your family members and your identity. If you are married, you must provide this information for you and your spouse.
If you are concerned with long term care, and wish to create or modify your estate plan to align with a good long term care plan, please feel free to call our office and schedule a complimentary consultation.