Does a Nursing Home Take Everything When You Need Nursing Home Care?
We have heard variations of the myth over the years: “A nursing home will take everything.” Savvy people rely on facts, not myths, and prepare for nursing home care before a health crisis strikes. Those people use the facts and laws to plan ahead and protect property and savings lawfully and legitimately. This article presents the facts. It also gives basic information about long-term care insurance and asset protection planning for savvy people.
Nursing Home Fees – No Free Ride
Nursing homes provide health care goods and services to elderly and disabled patients. A nursing home expects patients to pay for those goods and services. Nursing homes do not seize and sell people’s property, but they do expect payment. The nursing home does not care whether the patient pays directly, through insurance, or through a combination of Medicare, insurance, and Medicaid. If a patient does not make sure that the nursing home gets paid, Indiana law allows the nursing home to discharge the patient.
Nursing Home Costs – Over $77,000/Year and Rising
The Indiana Family and Social Services Administration (FSSA) regulates nursing homes and administers the Medicaid system that pays many patients’ nursing home bills. According to the FSSA website, private pay nursing home care cost $6,439 per month as of July 1, 2017. The average annual nursing home cost exceeds $77,000 per year and rises each year by about 5%. Those costs overrun most retirees’ incomes, and cause some retirees to drain savings and sell property.
Medicare Pays Sometimes, But Only Briefly
Some people believe that their health insurance or Medicare coverage will always pay for nursing home care. Those people believe a myth, because strict rules control Medicare and a Medicare supplemental insurance policy coverage. Medicare and most Medicare supplemental insurance policies limit coverage to the first 100 days of nursing facility care. Worse yet, several eligibility requirements disqualified many patients for any coverage.
(1) Medicare will not pay cover a patient who transfers directly from home to a nursing home or rehabilitation facility.
(2) A patient’s hospital admission on “observation” status ruins Medicare nursing home coverage.
(3) The patient must stay in the hospital on “inpatient” status through at least two consecutive midnights.
(4) Previous nursing home or rehabilitation admissions can use of all or part of the 100 days.
(5) Medicare coverage will stop if the patient refuses to cooperate or the facility determines that the patient no longer benefits from skilled care services.
Long-Term Care Insurance – The Best Long-Term Care Asset Protection Tool
Long-term care insurance provides the best long-term care asset protection. Long-term care insurance premiums vary depending on a patient’s age and health conditions (much like factors determining life insurance premiums). Long-term care insurance premiums can cost $3,000 or more per year for an individual and $5,000 or more per year for a married couple. Those costs discourage some people from buying long-term care insurance. Other people procrastinate until health problems make them uninsurable.
Long-Term Care Asset Protection Planning Without Long-Term Care Insurance
An experienced elder law attorney can help protect some property and savings from nursing home costs without long-term care insurance. Unfortunately, too many people waste time and money on advice from people who are not experienced elder law attorneys.
Community Spouse Protection
Medicaid law provides asset protection opportunities for a nursing home resident’s spouse living at home (The law refers to the spouse as the “community spouse.” An experienced elder law attorney can help a community spouse take advantage of those protections. An asset protection plan can help a community spouses keep a car, home, other real estate, and substantial savings.
Asset Protection Planning for Single People
A single person protect property and savings in most cases. A married couple with a community spouse can protect assets more easily, but an experienced elder law attorney can help protect assets in some of the worst cases. A carefully designed asset protection plan can often help protect more than half of an unmarried nursing home resident’s property and savings.
Consult an Elder Law Attorney Before a Health Crisis Strikes
Every myth begins with a shred of truth. The belief that nursing homes “take” people’s property and savings is a myth. Part of the truth behind the myth is that nursing home care is expensive. The rest of the truth is that people who do not plan ahead must often sell property and wipeout savings to pay nursing home expenses. Savvy people get sound advice and guidance from experienced elder law attorneys to protect their homes and hard-earned savings.
About the Authors
Jeff R. Hawkins and Jennifer J. Hawkins are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers and active members of the Indiana State Bar Association and National Academy of Elder Law Attorneys. Both lawyers are admitted to practice law in Indiana, and Jeff Hawkins is admitted to practice law in Illinois. Jeff is also a registered civil mediator, a Fellow of the American College of Trust and Estate Counsel and the Indiana Bar Foundation; a member of the Illinois State Bar Association and the Indiana Association of Mediators; and he was the 2014-15 President of the Indiana State Bar Association.
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