An unpleasant fact of life is the prospect of needing long-term care someday. Statistics tell us that 70 percent of Americans will need long-term care for some period of time before death. So it is not just possible, but very likely that you or someone close to you will need long-term care.
In Hawai‘i, the average monthly cost of care in a skilled nursing facility is $8,850. At least, that is the figure used by MedQUEST, the office that administers Medicaid benefits in the State of Hawai‘i. If you have researched nursing home costs, you know that the MedQUEST figure is low. In private-pay situations, the cost easily reaches $12,000 per month. The cost of receiving skilled nursing care at home is even higher.
If you do need nursing home care, how long will you need it? The average stay in a nursing home is between two and three years, but that figure is misleading. Many people pass within the first six months of moving into a nursing home, but those who make it past six months tend to last about six years. Thus, at $12,000 per month for six years, you could easily be looking at $864,000 in nursing home bills for yourself or a loved one. How will you pay those bills?
If you are fortunate, you have $1,000,000 set aside for yourself, and another $1,000,000 for your spouse, if you are married. An alternative would be having long-term care insurance that would cover your (and your spouse’s) expenses for life. But what if you are not so fortunate?
Our government has established a safety net called Medicaid that works alongside Medicare and private health insurance to provide the funds to pay for long-term care for those who qualify. To receive Medicaid benefits, a single individual can own very little in the way of assets, but a married couple can own enough to give the “well” spouse a shot at never having to try to qualify for Medicaid. However, in order for you to maximize the overall benefits for yourself (and your spouse), a good plan can make a world of difference.
If you are going to save for nursing home expenses, the sooner you start, the better. If you are going to buy long-term care insurance, the sooner you do so, the better. In the same way, if Medicaid will be your family’s only viable option for paying for long-term care, the sooner you plan, the better. The longer you wait, the more opportunities will go by the wayside.
So sit down and take stock of your resources. Do you have enough socked away to pay for long-term care? If not, do you have long-term care insurance, or could you qualify for it and afford the premiums? If you have not answered “yes” yet, you might wish to talk with an estate planning attorney who can guide you through setting up a plan to qualify for Medicaid benefits without having to impoverish yourself and leave nothing behind to your descendants.
SCOTT MAKUAKANE, Counselor at Law
Focusing exclusively on estate planning and trust law.
Watch Scott’s TV show, Malama Kupuna
Sundays at 8:30 pm on KWHE, Oceanic channel 11
O‘ahu: 808-587-8227 | maku@est8planning.com | www.est8planning.com
