Common Long-Term Care Planning Misconceptions

Many people share common concerns as they reach retirement age: Will they have the ability to remain independent in their homes without intervention from others? Are they going to be able to maintain good health and receive adequate health care? Will they have enough money for everyday needs and not outlive their assets and income? Despite the fact that thousands of Americans are concerned with these aspects of aging, many have failed to develop adequate long-term care plans that specify which services they will need and how they will pay for them. Unfortunately, many Americans also share common misconceptions about long-term care planning that may be factors in why individuals fail to establish a properly executed long-term care plan prior to when they need the services.

The Misconception That an Estate Plan Will Provide Coverage for Long-Term Care Services

A properly executed estate plan is beneficial, but limited in its guidance for long-term care. Many believe that a will and testament will cover all necessary long-term care needs. Unfortunately, a will does not adequately account for long-term care services and will not provide coverage for care.

The Misconception That Medicare Will Provide Support for All Aspects of Long-Term Care

The current costs of long-term care are exponential and increasing every year. According to the 2016 Genworth Cost of Care Survey, the average annual rate for a private nursing home room is $92,378. To meet the financial demands of long-term care, many turn to federal assistance programs, including Medicare and Medicaid.

Both Medicare and Medicaid are federal- and state-funded programs that provide health care coverage to Americans who are elderly, disabled or low-income. However, the two programs differ from one another in a meaningful way. Unlike Medicare, Medicaid will cover an individual’s long-term services in the home or at a nursing home facility, including home health care aides and personal care aides who assist with custodial care. Custodial care is non-skilled personal care or services that can include help with bathing, dressing, eating, getting in and out of a bed or chair, assisting with medications and toileting.

The Misconception That You Cannot Qualify for Medicaid Benefits

To be eligible for Medicaid benefits, an individual must meet general, functional and financial criteria. A Medicaid beneficiary must be 65 years of age or older, permanently disabled or blind, a U.S. citizen or meet immigration standards, and a resident of the state where they apply. To be eligible to receive long-term care service, the individual must be assessed and determined to be in need of this type of care. A New York medical specialist will evaluate the individual’s needs and will determine if he or she will need nursing home care, assisted living, or if they are a candidate for home care as well as community-based Medicaid services. The evaluation will determine if the individual can perform activities of daily living on their own or if they need the assistance of another individual. The state will assess an individual’s daily income and available assets to determine if he or she qualifies for the Medicaid program.

In New York State, the household size and maximum income level per year is as follows:

Household Size

Maximum Income Level
(per year)

1

$15,800

2

$21,307

3

$26,813

4

$32,319

5

$37,825

6

$43,331

7

$48,851

8

$54,384

Many individuals believe that, if their assets and income exceed these amounts, they are ineligible to receive Medicaid and will have to pay for long-term care costs out of pocket. However, a disabled individual may be able to protect their family’s assets and resources through the establishment of a pooled income or special needs trust. Trusts can help individuals maintain eligibility for public benefits such as Medicaid and Supplemental Security Income (SSI). If an individual obtains new resources, he or she may be able to put those resources into a trust to maintain eligibility for these services.

Once an individual inputs the resource into a trust, he or she may be able to submit any non-medical bill to it that is in the participant’s name. These types of bills may include telephone, Wi-Fi, cable, auto insurance, credit card, shopping receipts, rent, utilities, and more. The trust will then pay the bill directly on behalf of the individual. Unlike individual disability trusts, which are available only to those under 65 years old, pooled trusts can be created for beneficiaries of any age and can be established by the beneficiaries themselves.

Medicaid pays for the largest share of long-term care services, but only if the individual meets eligibility requirements. The Medicaid application and eligibility professionals at P&P Medicaid Consulting, Inc. assists Nassau County, Suffolk County, and Queens residents in preparing applications for Medicaid eligibility, while taking advantage of programs and planning options that will protect their income and assets. For more information or to schedule a consultation, call our Long Island, New York Medicaid consulting office at (516) 541-4770.

 

2 thoughts on “Common Long-Term Care Planning Misconceptions”

  1. I like that you mentioned that medicaid will cover long term services in home or at a nursing care facility. We’re helping my in-laws get set up with some long term health care planning, and I think that’s a good thing to keep in mind! I really like the fact that we can be prepared for their health care in the future, and can plan to have the help we need as well!

  2. This article has taught me a lot about long-term care services. It was interesting to learn that this type of care can help you to ensure your loved one is looked after 24/7. I hope this article can help us to avoid my grandma missing her medication.

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