Maryland Medicaid and Long-Term Care Planning
The Challenge of Paying for Nursing Home Care in Maryland
Did you know that, if you are single, the odds are 50 percent that you will need long-term care? If you are age 65 and married, the odds are 75 percent that you or your spouse will need long-term care. The average nursing home stay, by the way, is 2.5 years.
Long-term care is expensive. Nationally speaking, a year in a nursing home is estimated to cost an average of $100,000. Is it any wonder that 50 percent of mature couples become impoverished within a year after either spouse enters a nursing home? The number jumps to 70 percent for widowed or single persons.
By the way, forget about Medicare paying for your chronic long-term care needs. Medicare only pays for acute nursing home care for up to 100 days, and even then your eligibility and payments are subject to very strict requirements. Remember, too, Medigap (i.e., Medicare Supplement) policies typically will not pay for your chronic long-term care needs either.
What about giving away your assets to your loved ones to qualify for Medicaid? Legally speaking, any transfer of assets for less than fair market value (i.e., a gift) may subject you to a lengthy period of ineligibility under the complex and confusing web of Medicaid Regulations. And transferring assets can be hazardous for other reasons. Consider this: What would happen if your transfer of assets to loved ones rendered you ineligible for Medicaid assistance, AND then those loved ones subsequently lost the assets through squandering, divorces, lawsuits or bankruptcies? Not good.
Nearly Half of Senior Citizens Will Require Long-Term Nursing Care
The key to proper long-term care planning is to plan now rather than to react later. There are numerous legitimate strategies to preserve more of your assets, but only if do not procrastinate until it is too late.
One of the best strategies may be to insure your financial security through proper Long-Term Care Insurance (LTCI). Again, don’t wait too late to apply, because your health actually purchases LTCI, your money just pays the premiums. [That is why my wife and I purchased our LTCI before we were age 50!]
No one relishes the notion of paying insurance premiums of any kind. After all, you can pay and pay and pay... and never collect on a claim. If you are fortunate.
The purpose of insurance is to transfer a risk that you can afford (i.e., the payment of a premium with no guarantee of its return) to cover a risk you cannot afford. For example, what homeowner does not insure their personal residence from damage due to a fire? Or, what automobile owner does not insure their auto from damage due to a collision? Consider this: The odds of a major fire insurance claim are about one in 88, with an average claim of $2,000. The odds of an auto insurance claim are about one in 47, with an average claim of $8,000.
Against this backdrop, why would any responsible, mature American (i.e., age 65 or older) not insure against the financial risk of requiring long-term care at some point? Consider this: The odds are nearly one in two that a seasoned citizen will need long-term care for about 2.5 years at an average cost of $76,460 in 2008, making the average claim in excess of $200,000.
Medicaid Resources
To learn more about Maryland Medicaid and Medical Assistance, follow up with these two articles written by Elder Care Attorney, David Wingate:
- How Do I Qualify for Medicaid;
- Medicaid Eligibility: Elders Who Transfer Assets at Risk;
- What Will You Do When Medicaid / Medicare Will Not Provide for Your Long-term Care? and
- Medicaid Myths: A Collection of Plausible but False Propositions.