With changing healthcare and increased longevity, it is important to acquire long term care insurance, because both State and Federal budgets are threatening certain Medicaid benefits. An adequate estate plan should include measures to protect against devastating healthcare costs. One solution is long term care insurance.
An estate planning team should consist of an attorney, financial advisor and an insurance professional in order to properly plan for the future. A comprehensive plan will help to protect and grow assets and safeguard against the possibility of cuts to Medicaid.
Long term care insurance contributes to paying for home care assistance or care in a nursing facility. Additionally, many people have irrevocable trusts. An irrevocable trust has a five-year look-back period to qualify for Medicaid nursing home care, which is why it is beneficial to purchase long term care insurance in order to cover the cost of care during the five-year look back period.
In addition, certain individuals may opt to purchase a long term care policy because their income is so high that they may not qualify for Medicaid. Furthermore, those with income exceeding the lower Medicaid rate are forced to pay privately. However, according to federal law if a person is eligible for Medicaid but their monthly income exceeds the Medicaid rate, the nursing facility shall allow the person to pay the same rate that Medicaid would have paid.
The income of the individual can include social security payments, pensions, distributions from retirement assets, payouts on a long term care policy, etc. With proper long term care planning, the assets could be protected in an irrevocable Medicaid asset protection trust while the income is being used to pay for the facility.
Many people are apprehensive when it comes to purchasing long-term care insurance due to paying premiums for years and believing that they will never utilize the policy. However, with the ever-changing health care system, it is imperative to plan accordingly. Additionally, there are new policies referred to as hybrid policies, which includes a life insurance policy with a long-term care rider. This allows access to cover the cost of care and heirs can receive a death benefit.
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.