Protection From Nursing Home Impoverishment

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Nursing Home Costs and How To Protect Yourself From Them

This is interesting: How much did you earn, or will you earn in your lifetime?  Most people work 40 hours (or more) per week, 50 weeks per year, for 40 or more years.   That totals at least 80,000 hour of work in a lifetime.  As a result of all of this work, most people have accumulated a “nest egg”.  The question becomes: is my nest egg secure?

According to “Financial Web: 70% of people who live to age 70 will require long term care (LTC) during their lifetime.  About 20% of LTC recipients need care for more than 5 years.  Women, on average need 3.7 years of LTC in their lifetimes.  Men need 2.2 years.  The cost of Assisted Living is about $4,000 – $5,000 monthly, while skilled facility care commonly runs $6,000 to $8,000 monthly.

So, more questions: Do I expect to live to age 70?  If so, will I be one of the 7 out of 10 in this room who need LTC?  Then, what happens to my spouse.  Does he or she need to spend all of our “nest egg” to pay for the nursing home spouse’s care?    In Illinois, there are protections for the community spouse of a nursing home or supportive living (like assisted living) resident.  This is called the spousal impoverishment provision with the expressed purpose to allow the community spouse to be able to live out their lives with independence and dignity.

Under the Medicaid Spousal Impoverishment Provisions, a certain amount of the couple’s combined recourses is protected for the spouse living in the community. Depending upon how much of his or her own income the community spouse has, an amount of income belonging to the spouse in the nursing home can also be set aside for the community spouse’s use.

In a brief summary, the Community spouse, in Illinois, can retain funds for self-support without disqualifying the nursing home spouse from eligibility. This includes $109.500 in cash/non-exempt assets; most personal effects and household goods, the home lived in by the community spouse (generally limited in value to $525,000 in 2012).and a motor vehicle.

The Community spouse may also keep a monthly income for self-support of $2,739.00. Income in excess of that amount is available to pay the nursing home spouse’s care costs.

It is always best to secure professional advice while planning for the aging process.  Many people have their wills, powers of attorney and planning done, but fail to keep them up to date.  This planning is a living and changing process.  Legal matters such as wills, trusts your desires should be reviewed yearly and upon life changes.   It is wise to select an attorney who specializes in elder law, wills and trusts; or estate planning .  An estate plan may also involve an insurance product and/or Veteran’s benefits to assist people in paying for long term care (LTC).  These LTC products are also very specialized and vary greatly company to company.  Again, seek professional advice.  For more information about Illinois Assistance Programs go to http://www2.illinois.gov/hfs/Pages/default.aspx

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Steven A. Buttice is the president of Medical Reimbursement & Management Services, Inc., a firm specializing in issues affecting seniors, including seminars and consultation on Medicare Plans, Long Term Care and other types of insurance, claims issues, and sales/service of insurance products since 1984.

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