Have you created a plan for paying for long-term care as you age?
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Have you created a plan for paying for long-term care as you age?

On Behalf of | Apr 1, 2020 | Estate Planning |

When you reach the age where you start thinking about retirement or when you can qualify for Medicare, you may think that you don’t need to worry about medical costs in the future anymore. Unfortunately, many people don’t realize that there are massive gaps in the coverage offered by both Medicare and many private insurance plans, especially when it comes to the unique needs people have as they age.

Long-term care services are usually not covered under traditional health care and Medicare insurance plans. People need to either purchase supplementary insurance for long-term care or plan ahead for covering medical costs as they age. Given that long-term care insurance is usually cost prohibitive once someone is in their 40s or 50s, the best approach to protecting yourself from the expenses associated with long-term care usually involves careful financial planning.

What qualifies as long-term care?

Many people feel confused by the idea of long-term care somehow being separate from other basic medical needs. Long-term care can include services such as a residential stay in a nursing home or even help in your home by a nurse, home health aide or certified nurse’s aide that will continue indefinitely.

These services can cost hundreds of dollars a day, making them prohibitively expensive even for those with excellent retirement savings. Those costs often mean that people must apply for Medicaid in order to cover the cost of residential or nursing care.

If you have assets, you need to plan ahead to qualify for Medicaid

Whether you own your own home or have set aside financial assets that you want to leave behind as a legacy for your children or a charity that you love, you will have to completely diminish those assets in order to qualify for Medicaid in most cases.

The government will review 60 months of financial transactions and penalize you for any transfers or gifts made in those five years leading up to your application. The sooner you start planning to protect yourself by taking steps such as gifting assets to loved ones or transferring the ownership of your home and other valuables into a trust, the less likely you are to have to worry about penalties if you apply for Medicaid in the future.


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