The most important matter that elder law attorneys address is the long-term care situation.
Most senior citizens will need some type of help with their activities of daily living eventually. Some of them can receive the assistance they need in their own homes from family members and friends, but residential long-term care will often become necessary at some point.
Since Medicare is a health insurance program for seniors, and many elders require nursing home care, you may assume that Medicare would cover it. In fact, Medicare will not pay for the custodial care that nursing homes provide. This is a very big deal when you understand the state of Oklahoma nursing home costs.
Oklahoma Nursing Home Costs
Genworth Financial has been keeping tabs of the long-term care costs around the country for several years. For now, the most recent available figures are for 2021. On a national level, the median annual charge for a private room in a nursing home was $108,405 in 2021.
Here in Oklahoma where we practice, the number is a bit lower at $88,695. For a semi-private room, the median cost was $66,613. Some people can get the help they need in their own homes from a home health aide, and the median annual charge for that service was $60,600.
According to the United States Department of Health and Human Services, 21 percent of people that need paid care receive the assistance for between two and five years. They found that 13 percent of senior care recipients incur costs for more than five years.
When you do the math, you can see that the numbers can get rather large, and married couples may be confronted with two different sets of nursing home bills.
Medicaid Planning
The widely embraced solution is Medicaid eligibility. Since it is a need-based program, you can’t qualify if you have significant assets in your name. However, some assets do not count.
Your home is not a countable asset, with an equity limit of $688,000 in 2023. One motor vehicle, wedding rings, engagement rings, and heirloom jewelry are not counted. The items that you have around your house and personal belongings are not countable assets either.
You can have up to $1,500 of whole life insurance and the same amount set aside for final expenses. Unlimited term life insurance is permitted, because it has no cash value.
There are a couple of allowances for a healthy spouse when their spouse is applying for Medicaid to pay for long-term care.
One of them is the Community Spouse Resource Allowance that is equal to half of the countable assets up to a certain limit. In 2023, the limit is $148,620, and the minimum allowance is $29,724.
When a single person is applying for Medicaid, their income must be contributed toward the cost of the care that is being received. This requirement is set aside when there is a healthy spouse that needs the income to maintain a reasonable standard of living. They can receive a Monthly Maintenance Needs Allowance, and the maximum allowance this year is $3,716.
To account for the assets that are countable, you can establish a Medicaid trust. This would be an irrevocable trust, and you would not have access to the principal. You would be able to receive distributions of the trust’s income until you apply for Medicaid.
Advance planning is the key to the successful execution of this strategy, because the trust must be funded at least five years before you submit your application for Medicaid coverage.
Medicaid ADvantage Waiver for In-Home Care
There is also a Medicaid ADvantage waiver program for Oklahoma seniors that need help with their activities of daily living. If you can get the required care at home and you develop the right financial profile, this is another possibility.
Schedule a Consultation Today!
We are here to help if you are ready to work with an Oklahoma City or Tulsa elder law attorney to implement a nursing home asset protection strategy. You can send us a message to request a consultation appointment. You can reach our Tulsa office by phone at 918-615-2700, and the number for our Oklahoma City location is 405-843-6100.
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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