Having enough money to pay for a rental residence or “buying in” for life care in a senior facility is a reality confronting seniors in their 80s and 90s throughout America today.
Elder care attorney Howard S. Krooks, who has offices in New York and South Florida (Boca Raton, Aventura, Weston and West Palm Beach), provides vital information: “With assisted living facilities running anywhere from $2,500 to $5,000 per month, and more, and with nursing home costs running anywhere from $7,500 to $11,000, and more, it is no wonder seniors in their 80s and 90s are challenged by how to pay for the costs of long-term care. There are four primary sources of funding for long-term care. They are: private pay, Medicare, long-term care insurance and Medicaid.
"Private pay will only be available to the small minority among us that have hundreds of thousands of dollars in assets they can devote toward the cost of care. Most people are not in a position to privately pay for the cost of long-term care. Medicare only pays for long-term care in a nursing home (not assisted living or home care), and only up to a maximum of 100 days, in some cases even less. Further, there must be a three-day, three-night qualifying hospital stay preceding the nursing home stay in order for Medicare to cover the nursing home stay, and there is a co-insurance amount of $167.50 per day for days 21 to 100, unless the person has a Medicare Supplemental policy in place.
“Long-term care insurance is a good way to plan for the cost of long-term care if you are young enough and healthy enough and can afford the premium payments. However, if you are already in your 80s or 90s, it is unlikely that long-term care insurance will be an option for you. Finally, Medicaid may be an option for some people; however, a person cannot have more than $2,000 to qualify for Medicaid.
"So, what to do? The best option considering all of the above is to plan well in advance of the need for care. If Medicare days are limited and cannot be counted on as a long-term solution, and if long-term care insurance is not in place, your best option is to plan on preserving your assets to facilitate your care needs over and above that which Medicaid will pay. In order to do so, work with an elder law attorney to create an irrevocable trust at least five years in advance of the need for Medicaid services. In that way, you can obtain financial assistance from the government, and supplement your care needs through proper planning utilizing an irrevocable trust.”
Alan Taylor, of Boca Raton, responds to our question of how he faces the future financially:
“One of the single biggest concerns most seniors and we have is ‘running out of money’…outliving what we saved over the years, either through investments, earnings or retirement programs.
This is further heightened by having to help our children and grandchildren. The challenge is how to preserve assets, continue to live in our home and at the same time, continue to help our family where needed.
This concern is coupled with a ‘where do we go next? what are our next steps while we still have all of our faculties?’
While our primary residence is mortgage free, the house still incurs expenses ranging from HOA fees, insurances, landscaping, pool service, etc. as well as normal amounts of maintenance, repairs and replacements.
So the challenge for the 80-plus community is simple: maintain our current lifestyle as long as feasible and possible or give up the independence to find a new lifestyle in a senior living facility.
Trying to determine which type of facility is a challenge unto itself, a challenge that appears stifling. Straight rental, no money up front; a buy-in plus a monthly fee; investment with a percentage back upon death coupled with a monthly fee are among the many types of opportunities. Siphoning through the many offers is an overwhelming task for most people…something best understood by elder care professionals.
When all is said and done, we’ve told our children the best gift we can give them is: ‘you don’t have to help us financially,’ which is not the case for many people."
Mort Mazor is a veteran living in Boca Raton.