What Happens When I Can No Longer Take Care of Myself?
Ok, I worry. Odds are you do too, or you wouldn’t be spending the time to read an attorney’s blog. One of my favorite worries is wondering how I will afford long-term care services. That’s a nice way of saying “How do I pay for nursing home care if I need it?” I’m sure that many of you are like me and have had experience at least visiting a loved one or a community member in a nursing facility. You know how they generally look and feel, but do you know what they cost?
While nursing homes, or long-term care facilities, have come a long way since the seventies, those improvements in care and surroundings have a price tag. It is not uncommon to find the cost of long-term care in East Tennessee hitting seven thousand dollars ($7,000.00) a month. So, let’s do a little math. I will be out of pocket one hundred and sixty-eight thousand dollars ($168,000.00) if I need care for a two-year period. I don’t know about you, but honestly, that is significantly more money than I earmarked for care in my retirement plan.
When it comes to paying for long-term care, there are typically three primary payment sources. You must either pay for your care out-of-pocket, obtain Long-Term Care Insurance (LTCI), or apply for Medicaid.
Medicaid Coverage for Nursing Homes
Tennessee’s Medicaid program, called TennCare, provides coverage for nursing home residents who are age 65 or older, blind, or disabled and meet income and resource requirements. To obtain TennCare coverage for nursing home care, you must be financially eligible, and you must need the kind of care nursing homes provide. Nursing homes provide 24-hour supervised nursing care, personal care, therapy, nutrition management, organized activities, and other services.
To apply for Medicaid coverage for nursing home services, you can seek assistance from the state’s TennCare Connect web portal. You can review additional information and submit an application online or by calling TennCare Connect at (855) 259-0701. You can also submit a paper application.
So, Would I Qualify Financially for Medicaid Long-term Care Services?
In Tennessee, a single person can have a monthly income up to $2,313 in 2019 and qualify for TennCare-paid nursing home care. The Medicaid income limit for a married couple, with both spouses applying, is $4,626 per month in 2019. These LTC income limits are higher than the income limit for those applying for other health care benefits from Medicaid, meaning that it’s easier to qualify financially for Medicaid-paid long-term care than other Medicaid service. If you are a single person, you can have only up to $2,000 in assets, with a few allowable exclusions such as a car and your home (up to a value of $585,000 in 2019).
Tennessee Home and Community-Based Waiver Options
Tennessee’s Medicaid program structure recognizes that individuals who qualify for nursing home coverage might prefer to live in their homes or alternate care environments, such as assisted living residences. Living outside of a nursing facility could be less expensive for the state and more convenient and desirable for the individuals, for various reasons.
Talking to an attorney about qualifying for TennCare long-term care services may be a good solution for those of you who have too many assets or too much income to qualify traditionally. It is better to have those discussions earlier rather than later as any Medicaid planning typically gets scrutiny from TennCare if it was done within five (5) years of application. There are several options available for planning that might fit your needs. A few of those are irrevocable trusts, property transfers outside the lookback window, and Miller Trusts.
If Medicaid or Medicaid Planning really aren’t options for you then you can talk to your insurance provider about purchasing long-term care insurance (LTCI). There seems to be a sweet spot for purchasing insurance around the age of fifty (50). That seems to be the age in which most of us are still in good enough shape to get lower premium cost. Be aware that these policies are typically expensive.
When you are shopping for a policy be aware of the Long-Term Care Partnership Program. The Partnership Program couples the benefits of LTCI with special Medicaid eligibility rules to provide additional coverage if necessary. Similar to Medicaid, the State Partnership Program is a joint federal-state program meaning that although each state’s program must comply with certain federal limitations, each state can institute its own version of the program. As such, the LTC Partnership Program is not uniform in all states.
What is the Long-term Care (LTC) Partnership Program?
The LTC Partnership Program is a coalition between the state and an independent insurance company to provide a specialized insurance policy that qualifies the policyholder for exclusive Medicaid asset exemptions. It is important to note that not all LTCI policies qualify for LTC Partnership Programs as the policies must adhere to the specific conditions outlined in the Deficit Reduction Act of 2005 as well as state-specific requirements. Some policy requirements may include:
- The owner is a resident of the state in which the policy was purchased
- The policy offers comprehensive benefits for both in-home and institutional care
- The policy includes inflation protection
How does the LTC Partnership Program work?
For policies that meet their state’s LTC Partnership Program, the policyholder may retain an increased asset limit should they deplete their LTCI benefits and need to apply for Medicaid. This increased asset limit is allotted on a “dollar-for-dollar” basis. For every dollar of insurance benefits paid on that person’s behalf, their countable asset limit for Medicaid purposes will increase by that same amount. This compromise was created as a way to stabilize Medicaid spending and encourage people to purchase LTCI rather than rely solely on Medicaid to finance their long-term care.
An additional benefit is the elimination of estate recovery by Medicaid. Any benefits that are expended on the policyholder’s behalf by Medicaid are unrecoverable from the individual’s estate. This allows the person to not only protect their assets from a possible Medicaid spend-down but also ensure the preservation of their assets from estate recovery.
A New Option
Recently I have come across another option for addressing long-term care costs. I have a good friend at the Farragut Farm Bureau Office, John Sims. He casually mentioned to me that they have a life insurance product that carries a chronic illness rider. He provided me with the flyer for your reference. Click here to see a copy of the flyer.
The cost of long-term care is overwhelming, but if you take a few moments to look at your options and start planning now you will be prepared to alleviate the burden of long-term care from your family. If you need help finding the right long-term care solution for you or your loved one, our Elder Law team can help you navigate the complex maze of options and paperwork and find the right solution for you and your family. Contact us to find out more.
