Arizona Medicaid/ALTCS Planning
A major concern of many of our clients is how to handle the possibility that they or a loved one will need some form of long-term care, either at some time in the future or right away. Fortunately, this is an area with which attorney Michael Gerity has experience, and can expertly guide you through your options and help you find a way to pay for long-term care without having to spend all of your money first.
Long-Term Care Basics
Let’s cover some basics. When you’re disabled and unable to handle many of the tasks of daily living, you are categorized as someone who needs long-term care. Long-term care includes medical and non-medical care for people who have a chronic illness or disability. Most long-term care is designed to help people with the regular activities of daily living such as dressing, bathing, and using the bathroom. Long-term care can be provided at many different locations: in the home, in the community with adult day care, in assisted living facilities or finally, in nursing homes.
While you may or may not ever require long-term care, here are some concerning statistics. Did you know that 70% of people over the age of 65 will need some type of long-term care at some point in their lives? And, did you know that, by 2050, 27 million Americans will need long-term care? Many people who need long-term care will be cared for at home by unpaid caregivers, but do you have family members who would be able provide that kind of care?
Long-Term Care Costs
If you do end up having to go into a nursing home, the costs can be staggering. Expenses for nursing home care rise every year, and here in Arizona, the average annual cost for a nursing home room is $112,056. That’s $9,338 per month. Plus, the average national stay in a nursing home is about 2.8 years. So, just on average, you can expect a stay at a nursing home to take a $313,756.80 bite out of your estate.
Paying for Long-Term Care
Needless to say, finding a way to cover these kinds of expenses is critical, and planning ahead is your best bet. So what are your options for paying for long-term care? There are six possible options to consider:
- Use your own money. In light of the costs described above, only those with substantial income or savings are able to pay for all of their long-term care expenses from their own funds. However, this is what most people attempt to do at first, at least if they haven’t been properly advised by an experienced elder law attorney.
- Insurance. A relatively new option that is gaining popularity is long-term care insurance. This is a great option if you start your planning early enough and can afford the kind of coverage necessary to pay for all of your long-term care needs. However, policies can be confusing, and there can be limits on insurance payments per day, or limits on total expenditures.
- Reverse mortgage. This is an option whereby you draw on the equity in your home to pay for long-term care expenses. As long as you reside in the home, the loan won’t come due, and if you have sufficient equity, you may be able to pay for all of your long-term care needs. This option can work for some, but it is not a good choice for single people, or for those who want to pass their homes on to their heirs.
- Medicare. Medicare is the federal health insurance program that is available to people 65 and over. It provides limited, short-term coverage of some costs associated with long-term care. This is a very limited option, and will not cover anything but the most minimal long-term care.
- Aid & Attendance Pension for Veterans. For qualified veterans, this can be one option for covering at least a portion of your long-term care needs. However, the qualifications and limitations are complex, and figuring out how to navigate this option with Medicaid is tricky.
- Medicaid. Medicaid is the government’s medical welfare program, and it pays for a full 50% of the nursing home costs of Americans. Medicaid is a federal and state partnership that steps in to pay for medical and long-term health care expenses when most of a person’s wealth has been depleted. It’s “means tested” and is supposed to be available only when no assets are available from any other source. The Medicaid program in Arizona for long-term care is called the Arizona Long Term Care System, abbreviated as ALTCS (pronounced “ALTECS”).
Michael Gerity can assist you with planning for your long-term care needs and help you to navigate your way through the confusing maze of options to pay for that care.
If you are like 50% of Americans, you are likely going to end up relying upon Medicaid (ALTCS in Arizona) to pay for at least some of your long-term care needs. Medicaid won’t provide coverage until you meet a set of strict financial requirements, because ALTCS is designed to help people with low income and few resources. Unfortunately, far too many people “plan” for Medicaid eligibility by spending down all of their money, or by trying to give away their property. Please don’t do anything like this before you consult with an experienced elder law attorney!
You don’t have to spend all of your money to become eligible for ALTCS, and giving away your property will just end up making you ineligible for coverage for a period of time. Instead, meet with Michael Gerity and he will help you to create a comprehensive Medicaid plan. This involves structuring ownership of assets appropriately and making strategic transfers of assets so the money and property are not considered when determining whether you can qualify for Medicaid.
The sooner you create your Medicaid plan, the more assets you can protect. Medicaid looks back five years from the time you apply for coverage to determine if you have transferred assets, and a transfer of money or property can trigger a period of disqualification. If you have made your plans well in advance of needing nursing home care, this will not be a concern. This is one big reason why it is beneficial for young people to talk with elder law attorneys and make their plans well before they reach their golden years. Of course, if you were not able to plan well in advance of needing long-term care, we can still help you to preserve at least some of your assets.
Israel & Gerity provides comprehensive advice and planning to people of all ages on a wide range of elder law issues, including Medicaid/ALTCS planning. Give us a call so that we can start the planning process so that you and your family will not have to worry about your future care needs.