October is Long-Term Care Planning Month
October marks the beginning of Long-Term Care Planning Month. One of the realities of aging is the possibility that we may be diagnosed with a chronic and/or debilitating disease that may limit our independence, ability to experience a high quality of life, and increase the risk that we will outlive a fixed income. This is where long-term care planning comes in.
A long-term care plan encompasses all the resources available to an individual – whether it be a long-term care insurance policy, Medicare, Medical Assistance, or Veterans Administration benefits – in order to address covering the cost of care (which may include home care, assisted living, skilled nursing, or any other institution that provides the necessary level of medical care). For married couples, long-term care planning focuses not only on care needs of the ill spouse, but also helps protect the couple’s finances so the healthy spouse can live comfortably as they age.
Paying for Long-Term Care
At the beginning of the care continuum, family resources are typically used. There are some tax-advantaged ways of paying for care, which would include using retirement accounts that have deferred income taxes, such as IRAs or 401ks. With the onset of medical expenses, the person receiving care can qualify for a medical expense deduction which can be used to offset the income taxes generated by taking distributions from retirement accounts. Depending on the amount of retirement savings available to a family, this could cover care costs for a period of time.
Long-term Care Insurance
Another method of paying for care is through long-term care insurance. You may have long-term care insurance purchased that can be used to pay for your care. You should carefully review your policy to determine what benefits may be provided. For example, a long-term care insurance policy can pay for in-home care, assisted living care, and care at a skilled nursing facility. It is important to know what your coverage is so that you may access your policy benefits at the time your care needs arise.
If you are a Veteran, your service may qualify you for certain benefits through the Veterans Administration (“VA”), which can pay for some or all of your long-term care. Veterans improved pension with Aid and Attendance benefits is a program that can provide you with a monthly payment that can be applied towards care of your choosing. This can be used to pay for in-home care, care at an assisted living facility or skilled nursing care. If you have service-connected disability, you may be entitled to benefits that would pay for in-home care, care at a VA Community Living Center, or care at a VA-contracted nursing facility.
Lastly, if your assets fall within certain eligibility limits, Medical Assistance (Medicaid) may be available to help pay for your care. Medical Assistance may be accessed to pay for care at all levels, from in-home to skilled nursing. There are many different rules and asset limits to be aware of to access Medical Assistance. It is important to plan ahead if Medical Assistance may be required to ensure that you are able to collect the benefits you need to help pay for care.
The MAB Difference
Here at Maser, Amundson & Boggio, we welcome the opportunity to meet with you to discuss your specific situation. Our attorneys will get a solid understanding of your circumstances, including your age, health concerns, eligibility for various programs, insurance benefits and existing income streams. Because we understand the intricacies of programs such as Medicare, Medical Assistance, Veterans’ benefits, long-term care insurance policies and how they all work together, we can help you put a plan in place that maximizes your benefits while protecting your income. By planning for the worst-case scenario and having multiple options available to you, you can feel confident that you will receive adequate medical care when you need it.
We all hope that we will not experience a long, painful illness as we age, but statistics indicate that a high percentage of the population will require long-term care for at least a period of time. Having a plan in place for such a possibility gives you the peace of mind and confidence that you will be taken care of in a manner that is consistent with your values and needs.