It is very hard to envision the way life will be when you reach a certain age that is in the future. You can make assumptions, but you may find that things are very different than you imagined they would be because of the eventualities of aging.
If you were a runner, you may have to transition hiking, and the hikes can turn into more modest walks out of necessity. At some point, you may actually need help with your ordinary activities of daily living.
How Likely Is It?
A lot of people know that there are those that require living assistance, but they assume that it is a small minority. In fact, 70 percent of people that are attaining senior citizen status will need help with their day-to-day needs.
Some of these folks will be able to rely on family members and friends to provide a bit of assistance for free, but others are not in this position. There are also those that have willing family members, but the level of care that is needed is beyond their capabilities.
Long-Term Care Costs and the Medicare Problem
From a financial perspective, you may not worry about long-term care costs because you know you are going to qualify for Medicare when you are a senior.
Unfortunately, Medicare does not pay for the custodial care that you would receive from an in-home health aide, and it does not cover a stay in a nursing facility.
A full-time home health aide in the Los Angeles area will typically cost over $50,000 a year, and the median charge for a private room in an L.A. nursing home was in excess of $126,000 last year.
Length of Stay
Just under half of people that need paid long-term care get the assistance for less than a year, and 40 percent are in the one-to-five-year range. Thirteen percent of individuals that are paying for long-term care accumulate the bills for more than five years.
These numbers can get disturbingly large, and married couples can be forced to deal with two different sets of long-term care bills
Medi-Cal Home and Community Based Services Waiver
Medi-Cal will pay for long-term care if you can gain eligibility, and there is a Home and Community-Based Services Waiver that covers in-home care. The latter can be the preferred course of action for a wide range of people for a number of reasons.
First and foremost, the comfort and familiarity of home is extremely important for many seniors. This is true in a general sense, and a move into a nursing facility can potentially cause disorientation, anxiety, and depression.
There are aging in place home modifications that can be made to adapt the surroundings to the physical limitations of a senior with mobility challenges.
Plus, even if there is a paid caregiver coming in, family members typically find it much easier to spend time with loved ones when they are at home.
In many cases, an adult child will adapt a portion of their home to accommodate an aging parent, and there is a multilayered support system in place in these instances.
Since Medi-Cal is a need-based program, there is a $2000 asset limit, but an applicant’s home is not a countable asset. However, Medi-Cal is required to seek reimbursement from the estates of deceased beneficiaries, so a lien could be placed on a home that is owned by a beneficiary.
Fortunately, there is a very effective solution in the form of an irrevocable, income only trust. If you implement this nursing home asset protection strategy, you convey your home and income-producing assets into the trust well before you need long-term care.
The income will allow you to maintain your lifestyle, and the home will no longer be in your personal possession even though you can still live in it. If you fund the trust at least 30 months before you apply for Medi-Cal, the assets in the trust would not count.
Your home would be protected since it is owned by the trust, so this can be a turnkey solution if you act in advance.
We Are Here to Help!
If you are ready to work with a Los Angeles elder care planning attorney to develop a plan for aging, our doors are open. You can send us a message to set up a consultation appointment, we can be reached by phone at 310-337-7696.