It is a safe assumption to say that nearly everyone is aware that advances in medicine have resulted in a dramatic increase in life expectancies. However, not everyone is aware of the correlation between increased life expectancies and the high cost of end of life care.
While the high cost of health care in general is common knowledge, most people are surprised to learn that long term nursing home care is not covered by traditional health insurance or even by Medicare.
Medicare can be expensive
When someone is surprised is to learn that Medicare does not pay for long term nursing home care, they are usually even more surprised to learn how expensive this care can be. According to the Florida Health Care Association, the average cost for a semi-private room is $223.00 per day, which is nearly $81,395.00 yearly. The average cost for a private room is $256 per day, which is nearly $93,440.00 yearly. With costs like these, it is easy to understand how a lifetime of hard work and saving can be wiped out in very short order. Long term care insurance can be a solution for some people, but the high cost of this insurance is prohibitive in most cases.
In contrast to Medicare, Medicaid does pay long term nursing home benefits for people who qualify financially. In Florida, these nursing home benefits are provided through Medicaid’s Institutional Care Program (ICP). To qualify financially for ICP, applicants must meet very strict income and asset requirements. In 2013, the income limit for an ICP applicant is $1,437.00 and the asset limit is $2,000.00. There are special rules for married couples when only one spouse needs benefits, and there are also special rules to protect personal property, one vehicle, and the family home up to a specified amount. However, most assets count against eligibility.
How to become financially eligible
To become financially eligible, an applicant for ICP benefits cannot simply give away their countable assets to friends or family members. Any transfer of assets for less than fair market value will result in a penalty period. With the exception of someone who commits Medicaid fraud, penalty periods do not carry any civil or criminal penalties. By contrast, a penalty period is simply a period of time during which Medicaid eligibility will be categorically denied. The length of the penalty period will be determined by the value of the assets that have been transferred for less than fair market value.
In contrast to penalty periods, there are legal and ethical planning techniques that can preserve assets. These techniques do not involve “hiding” assets because everything must be disclosed to Medicaid. The techniques that are potentially available will vary according to a family’s needs, circumstances, and objectives, but it is a shame when families wait until they become impoverished before seeking professional guidance.
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As a law firm that focuses on settlement planning, Staunton & Faglie, PL can be a valuable resource when it comes to public benefit preservation, lien resolution, special needs planning, settlement trusts, qualified settlement funds, Medicare compliance issues, and Medicare Set-asides. We look forward to working with you and producing winning results.