One of the biggest concerns many people have about growing older is spending the assets they earned over a lifetime to pay for nursing home care. The cost of nursing home care is astronomical. According to the New Jersey Department of Human Services, the average daily cost of nursing home care was approximately $330 a day in 2015. These costs can drain decades' worth of savings in a relatively short period of time.
A unique trend is emerging among Baby Boomers as they plan for retirement. Many are now attempting to position themselves through a process known as Medicaid planning to be more likely to qualify to receive Medicaid while still preserving their assets.Medicaid, a program that is run by the federal and state governments, is a program that assists the poor in paying for health care. While the state government determines eligibility, the federal government reimburses a portion of state Medicaid expenditures. Medicaid is not the same as Medicare, federal health insurance that covers people who are over 65 and disabled people. Eligibility for Medicaid depends on an applicant's income and resources.
Medical care is expensive, and this gets even truer as people get older, especially if they develop a serious illness or have to move into a nursing home. In these situations, even people who have set aside a significant amount of assets for retirement may have a hard time paying for their medical care.
In a move that may change the number of people going about Medicaid planning, Governor Chris Christie recently decided to use available federal funds in order to expand Medicaid. That decision is expected to3 save the state $227 million a year by enrolling 104,000 low-income people into the government health care program.
Troubling news is coming out of the aftermath of Hurricane Sandy and the Nor 'easterner that have recently hammered New Jersey and the Eastern seaboard. It appears that those in most need of assistance evacuating the storms and also most likely to suffer due to the cold and lack of provisions have in many ways been left to fend for themselves.
We recently wrote about the importance of including nursing home planning within estate planning. For many people, this will include Medicaid planning.
In out last post, we began looking at the importance of funding for long-term care. For some people, this will entail purchasing long-term care insurance and setting aside funds years in advance. For many others, there will be no planning but only responding to the need as it arises. For anybody concerned about how they will pay for their long-term care, though, Medicaid planning is useful.
A recent article in Forbes magazine took a look at various financial risks, 13 to be precise, that can be avoided. The various risks touched on occur because no action was taken, insufficient action was taken, or too much action was taken. Interestingly, and appropriately, some of these risks deal with things estate planning is intended to address.
In our last couple posts, we've been looking at the concept of Medicaid estate recovery. As we've noted, Medicaid estate recovery refers to the ability of state governments to recover from the beneficiary's estate benefits paid out while they were alive. Because these claims only arise after the beneficiary's death, they are sometimes described as Medicaid's "death tax."
Our readers are likely not aware of the Medicaid Estate Recovery process. Medicaid Estate Recovery is something you should be aware of as part of your Medicaid planning. The term refers to a process initiated by state governments in order to recover payments made under the Medicaid program from estates that are able to pay.