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Protecting Your Assets from Nursing Home Care Costs

Updated: Oct 4, 2022



Your loved one has been diagnosed with a debilitating condition or has been disabled from a sudden stroke. Along with the devastating news, the doctor recommends that they be placed in a nursing home. You have no idea what this will cost, let alone how you will pay for it. In short order, you learn that Medicare will not pay, especially for the long-term. You’ve heard of Medicaid but have no idea whether you qualify or even how to apply. To make matters worse, everyone you talk to is giving you a different answer.

You don’t need to deal with this situation alone. You need to discuss the Medicaid planning and application process with an experienced elder law attorney. An elder law attorney will have the necessary skills and contacts required to help you address the important issues, create a strategy, engage and direct the required healthcare staff, and work with you to protect your assets and get the Medicaid application approved by your state Medicaid agency.

How Expensive is Nursing Home Care?

Very expensive. Families are often surprised to learn that the average price of nursing home care in Pennsylvania can cost between $8,000-$13,000 per month. The cost can wipe out a family’s life savings very quickly. Consider the situation of this family:

A spouse relayed a conversation she had with the Director of Social Services for the nursing home where her husband was admitted. The Director explained to her that because they had $500,000 in retirement savings, she needed to pay the nursing home privately (“spend down”) until they had no more than $25,000 in savings. She was further advised that only then would her husband be eligible for Medicaid. Sadly, the nursing home did not inform her about the options available for accelerate her husband’s eligibility for Medicaid or how to protect more of her assets. This is often because the nursing home makes more money from private pay than Medicaid or may be unfamiliar with all the planning options available.

Does Medicare Cover Nursing Home Costs?

Unfortunately, no. Many people are under the impression that Medicare will cover all the expenses for nursing home care. That is not the case. The most Medicare will cover is the first 100 days and this will not be the full amount, even if you are eligible at all.

So Where Does Medicaid Come In?

For most people, Medicaid only becomes an option after Medicare benefits are exhausted. But what many people don’t realize is that Medicaid benefits are not automatic. In fact, to receive Medicaid, a patient and the patient’s spouse (if married) must first “spend down” their “countable” assets. In Pennsylvania that limit is $2,400 for a single person, but gets more complex for married couples. There also are categories of assets that will be automatically exempt for purposes of qualification. Your IRA and retirement assets are not automatically exempt.

Is it Too Late to Protect Assets?

Not at all. But you should act quickly and don’t try to transfer assets away without sound legal advice. When a single individual (no spouse, divorced or widowed) needs to enter a nursing home for long term care, and they have assets that are significantly greater than the amount permitted for Medicaid nursing home eligibility, the implementation of a Medicaid crisis plan is often the most logical and financially prudent option available.

In the simplest of terms, a crisis plan is a plan when, immediately prior to the filing of a Medicaid nursing home application, the patient’s assets are retitled or transferred. There are legal strategies that allow a person who needs long-term care to divest themselves of some of their assets and use the rest to pay for their care until Medicaid eligibility is met. Those assets can be used to pay for a spouse still at home or as a legacy for children and grandchildren. Timing is critical.  The sooner you act, the sooner Medicaid eligibility can be established.  Delays can be costly.

Don’t Go it Alone

The best time to prepare for unexpected nursing home costs is before you need them. But if you or a loved one have found yourselves facing a crisis requiring immediate long-term care and have questions about whether you can qualify to receive Medicaid benefits, you need to contact an experienced estate planning and Medicaid planning lawyer. The compassionate Pennsylvania Medicaid planning attorneys at Fiffik Law Group have the experience necessary to be your trusted advisors through every season and change of life. Our Pennsylvania estate planning and Medicaid planning lawyers are well-versed in today’s Medicaid and estate planning laws needed to protect your income, assets, and your family’s financial future. To schedule your confidential appointment, call us at 412-391-1014 or contact us online today. We have offices conveniently located in the Pittsburgh and Philadelphia metro areas, and can come to your home if you can’t come to our office.

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