In this section: Why planning is important. Background for the creation of the Medicaid program. Problems encountered when confronting the costs of long term care. Planning for long term care is an issue important to every family in America. Nursing homes are a fact of life that will more than likely affect every one of us in some way. In addition to the personal issues such as displacement and the loss of independence, the stark reality of potential financial ruin looms large when facing an ongoing $4,000.00 to $5,000 per month bill for an average of 30 months. Affording the high cost of long term care has plagued American families for decades. Spouses would divorce, assets would be plundered to nothing until finally the government would step in with some form of payment to keep the individual in care. Obviously, this was not a good solution to a very common problem. In order to reduce the burden on our senior population and keep them from impoverishing themselves so they could qualify for help, the federal law was finally changed in 1986. The law established new criteria to determine eligibility; it increased the amount of assets you can keep and still be eligible for assistance to pay for care. Many seniors still believe that the Medicaid program is welfare; quite simply it is not. It is merely the government's answer to a pressing social problem. The law started out quite liberal in its application but ever since Congress created it, there has been a steady attempt to limit and reduce its effectiveness through changes to the law. One effect of these changes is we are now faced with a convoluted legal structure used to determine eligibility for Medicaid benefits. It's not as easy as "let me see your bank statement, okay, you are under the limits...you get benefits." Instead, there are look-back periods of three and five years, there are income caps, and income trusts to get around those caps, transfer penalties and waiting periods. Even an asset is not simply an asset; it is either countable or not countable. Long term care, that is, nursing home care, is expensive averaging from $3500.00 to $4,500.00 per month. More often than not the family does not have sufficient income to pay the ongoing cost of care. This means that there is a steady and rapid depletion of the family's savings to meet the shortfall. This reduction in savings is increased when there is a spouse who is still trying to make it in the community. For example, a wife who has a spouse in a nursing home has that expense and still needs to continue to maintain her home and well being. The steady drain produces an obvious outcome: complete depletion of assets and insufficient income to maintain the spouse in the community, in addition to little or no inheritance to pass on to the children. It is my hope that this booklet will help you begin the process of understanding the issues surrounding planning for long term care in a nursing home. These are serious issues. And occasionally we may feel overwhelmed because there seems to be no way out of these problems. Let me assure you though that nothing is insurmountable. There are solutions.

© Copyright 2000 Sean W. Scott, Esq., All Rights Reserved. Click here for more information.
Technical questions/comments? Contact Tech Support
Editorial questions/comments? Contact Editorial
Advertising/Sponsorship inquiries? Contact Business
Virtual Law Office is a legal web site presented by the Law Offices of Sean W. Scott, it is not intended to create an attorney client relationship, please see our disclaimer.