Medicare is a federal program administered by each individual state that pays for inpatient hospital care, doctors care, certain types of treatments, and medications. Medicaid is also federally funded and administered by the states, but it pays for the cost of long-term care. Medicaid is a means-tested program, such that a person will not qualify for Medicaid if their income and assets exceed a certain level. A person qualifies for Medicare by being age 65, blind or disabled.
Long-term care insurance is very similar to any other kind of healthcare insurance, except that it only pays for nursing home care rather than hospital care or doctor visits. The cost of long-term care varies from facility to facility and from state to state, but right now the statistics show that the national average is anywhere from $8,500 to $10,000 a month. Plush facilities will cost more than that, and the less expensive facilities will usually cost around $7,000 or $8,000 a month.
If an individual cannot afford to pay for long-term care out of their own pocket, then they will need to qualify for Medicaid. In order to qualify for Medicaid, a person’s income and assets must be below a certain level. If a person is fortunate enough to have already obtained long-term care insurance (which typically isn’t affordable for older individuals), then it will pay for most—if not all—of the nursing home costs.
What a well-developed plan for aging parents will depend on the circumstances of a particular situation. For example, if an aging parent’s family members are able to pay for a facility or a caregiver, then that will affect the plan. A plan will include basic estate planning documents so that the assets of the person are provided for upon death, and so that there’s a way for a person, other than the client, to manage those assets with a power of attorney while they’re alive. Transfers ore gift-giving during a lifetime period can also be developed in order to help the person qualify for Medicaid by reducing their assets, if done within at least 5 years before applying for Medicaid. Regardless of the type of plan that will be developed, it’s important that it is started as early as possible. The longer a family member waits, the more difficult it will be for them to develop a good plan for their aging parent.
The appropriate time to engage in elder law planning is at least five years before a person plans on retiring from employment. For many people, once they have reached retirement age, their health has started to decline and they might begin to develop additional health problems. It’s never too early to start planning, but most people don’t start very early because they’re planning for other family concerns, like children or grandchildren. As a result, they don’t think about planning for their own care.
One of the best ways to find a good elder law attorney is through referrals from friends or family members who have been satisfied with the work that a particular elder law attorney has done for them in the past. It may also be helpful to go to the National Association of Elder Law Attorneys (NAELA) website to identify elder law attorneys who practice in a particular geographical area that is convenient for the aging parent and his or her family members.
It is critical to understand that there are many resources for people who are trying to locate assisted living facilities or caregivers. In Michigan, there are local area agencies on aging which are like clearinghouses for resources and services for the elderly and disabled. A good elder law attorney will know about local resources and will be able to point someone in the right direction, whether that be towards caregiving resources, placement in a facility, financial help, or insurance help. It’s important to spend some time researching one’s options and speaking with friends and family members in order to be aware of all of the options.
For more information on Differences Between Medicare & Medicaid, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (248) 869-0030 today.