Paying for Long-Term Care

When a loved one needs to go into a nursing home, assisted living, or requires home health care, stress seems to pop up behind every corner.

How will you pay for the care? In New Jersey, depending on the location, monthly care costs for an assisted living are approximately $6,000 to $7,000 while a nursing home costs approximately $10,000 (or more) per month.

At these prices, it is easy to clip through a person’s life savings fairly quickly.

There are, generally, five ways to pay for long term care:

  1. Private pay. This involves simply writing checks to the facility each month to pay their invoices;
  2. Long-term care insurance. Unless you already have long-term care insurance, it is generally unavailable or cost-prohibitive to obtain by the time you need the insurance;
  3. Medicare. Medicare will pay for a maximum of 100 days of long-term care. Most people do not receive the full 100 days of coverage for various reasons, so this is an illusory benefit in the long term;
  4. Veteran’s Benefits; and
  5. Medicaid.

Medicaid is the primary payer of long-term care costs.

General rules

There are a number of eligibility requirements for Medicaid. This page focuses on the resource or asset eligibility requirements.

Generally, an individual applying for institutional (i.e. nursing home or assisted living) Medicaid must have less than $2,000 of assets.  For married couples where one spouse will continue to reside in the community, there are provisions which allow the community spouse to protect more assets and, in some cases, income, from the costs of long-term care.

Many people think this means they must pay the nursing home/assisted living all of their money until they have less than the required amounts. This is a very common misunderstanding of the law.

Without the assistance of an elder law attorney, you may very well spend a great deal more money paying for long-term care than is necessary.

Through strategic planning, an elder law attorney can help you come up with a plan to preserve as much of the individual/married couple’s assets as possible while expediting Medicaid eligibility.

How an Attorney Can Help

  • Review the circumstances particular to your situation;
  • Determine eligibility status for Medicaid assistance or other options to pay for care;
  • Determine exactly how much money the institutionalized individual and/or community spouse can keep;
  • Create a strategic spend down and asset protection plan which maximizes the amount of money that can be preserved and reduces the amount of the family’s responsibility to the nursing home/assisted living;
  • Expedite Medicaid eligibility;
  • Help you execute the spend down and asset protection plan so that you do not accidentally run afoul of the complex Medicaid rules; and
  • Assist you in preparing and filing the Medicaid application.

If your loved one will need long-term care in the next six months, you should immediately consult with an elder law attorney for assistance. Please call the Costanzo & Russom Law Group, LLC to see how we can help!