When you reach the age of 65, you will qualify for Medicare if you or your spouse have worked and paid taxes during your life. Everyone knows this is a health insurance program that is designed for senior citizens for the most part.
You would imagine that the coverage would extend to all medical expenses that are commonly incurred by elders. Unfortunately, there is a gaping hole in the long-term care coverage that is a major elder law issue. We will take a look at that issue in this post.
Long-Term Care
Medicare will cover convalescent care after an injury or illness when recovery is anticipated. However, if you spend time in a nursing home, the type of care that you are receiving would be categorized as custodial care. There are also in-home caregivers who provide custodial care.
This type of assistance is not covered under Medicare. Many people would say that it’s not fair, but it is an unfortunate fact of life.
Nursing Home Costs
It is not easy to pay, out of your own pocket, for a stay in a nursing home. This is especially true when you have been retired for years. Genworth Financial has been conducting research on an annual basis to measure the long-term care costs around the country.
According to their study, the median annual cost for a private room in Oklahoma City in 2024 is $96,808. The average length of stay is one year, and 13 percent of people who require paid care receive assistance for more than five years.
Genworth is providing projections for the future as well. They estimate that the median annual cost for a private room in a nursing facility in Oklahoma City will be just under $170,000 a couple of decades from now.
How Likely Is It?
It’s hard to imagine a time when you cannot handle your own day-to-day needs without someone else’s help. Especially when you have been capable all your life. This is human nature, but when you look at the statistics, a compelling picture emerges.
Once you reach the age of 67, your life expectancy is 87 years if you are a woman, and it is 85 years for a man. Things can be very different when you are an octogenarian.
According to the United States Department of Health and Human Services, just over half of elders will require paid living assistance eventually. Approximately 35 percent will ultimately reside in nursing homes.
Medicaid Planning
There is a solution that you can implement when you work with an elder law attorney from our firm. Medicaid is a jointly administered federal/state government health insurance program that will cover custodial care.
You’re probably aware of the fact that Medicaid is a need-based benefit. This means that you cannot qualify if you have more than $2,000 in countable assets. To develop a financial profile that will lead to future eligibility, you can convey resources to an income-only Medicaid trust.
The principal will no longer be yours in a legal sense; it would belong to the trust. As a result, it would not count if you apply for Medicaid, but you could receive ongoing distributions of the trust’s earnings.
If you need long-term care at least five years after you fund the trust, the principal won’t count, and you will be able to gain eligibility. Ultimately, the beneficiaries that you named will inherit the assets that you conveyed to the trust.
Schedule a Consultation!
We can help you implement a nursing home asset protection strategy, and you can set the wheels in motion by calling our Oklahoma City elder law office at 405-843-6100. Our Tulsa location can be reached at 918-615-2700, and you can alternately use our contact form to send us a message.
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
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