protecting money if you or your spouse are in a nursing home

[ed1964]

My wives grandmother has recently been put in nursing home after a stoke. It is costing her $5000 per month. They saved for years, and now it is going fast. Her husband passed 10yrs. ago and she is 92, so it is not a big deal if it all goes. I was concerned though, what if me or my wife had an accident and had to go into one earlier. I want to protect what we have for the other spouse. My wives grandmother receives the same care as the people who had no money and Medicaid is paying their way. I think it is unfair that she is penalized because they saved. Any advise would be great. Thanks 

[matchewed]

LTC insurance is usually the best bet for that scenario. Or have a large amount of money.

Relevant links - http://forum.mrmoneymustache.com/welcome-to-the-forum/long-term-care-insurance/
http://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/long-term-care-insurance-9118/
http://forum.mrmoneymustache.com/investor-alley/long-term-care-insurance-as-part-of-your-fi-plans/

[matchewed]

Also don't discount the other option. It may be abhorrent to some but a choice to die rather than waste away in a room is something that may or may not appeal to any individual.

[CommonCents]

Are you sure she's receiving the same degree of care?  I've heard the care provided through Medicaid is not as good as that provided through private pay.

The way to protect your money will likely vary by state.  In my state, the lawyers who practice estate recovery say the biggest issue is that people try to retain control over their money they've purportedly given away (e.g. have a trust set up, but can still change beneficiaries later, etc.).  You have to give up control after least 5 years before you would need Medicaid.  Also, at least in my state, I believe the home is somewhat protected for the other spouse (I believe it's the homestead exemption or other such - the "other" is a bit complicated, as the ill spouse may qualify for things such as the Frail Elder Waiver, a program authorized under our 1115a Demonstration, which allows us variances from certain Medicaid rules).

[ed1964]

Thanks for replies. I know she receives same care because her roommate is on Medicaid and My grandmother was in the same place on Medicaid before she passed.
Her home and land was given to her children when her husband passed, so they will not be lost. I was just concerned if something happened while you where young, (i.e.
accident) and you needed nursing home. I would hate to leave my wife with that problem ,and go broke too. By the way I am in Arkansas.   

[NorCal]

I always think of a paid off house as my long-term care insurance.  If I own a home outright, but can't take care of myself, the house could be rented, sold, or reverse mortgaged to cover old-age care.  Since most people only need long-term care for only a few years, this should cover most likely scenarios.

[MrsPete]

My wives grandmother has recently been put in nursing home after a stoke. It is costing her $5000 per month. They saved for years, and now it is going fast. Her husband passed 10yrs. ago and she is 92, so it is not a big deal if it all goes. I was concerned though, what if me or my wife had an accident and had to go into one earlier. I want to protect what we have for the other spouse. My wives grandmother receives the same care as the people who had no money and Medicaid is paying their way. I think it is unfair that she is penalized because they saved. Any advise would be great. Thanks

It's a reasonable concern.  A casual acquaintance of mine is in such a situation right now:  Her husband had a stroke in his mid-40s, and he was in a nursing home for several months.  She couldn't quit her job to stay home with him, so she was rather "stuck" as to how to proceed.  Fortunately, he's back at home now and is on the mend, but he will never be the same person again.

Disability insurance did cover a big portion of his costs, but it also took a BIG bite out of their savings, and now he isn't working.  She was in the "saving a bit, probably going to be okay to retire age 65-70" category, but now she's genuinely become concerned about their future.

Of course, her situation is unusual, but it COULD happen to any of us.

I always think of a paid off house as my long-term care insurance.  If I own a home outright, but can't take care of myself, the house could be rented, sold, or reverse mortgaged to cover old-age care.  Since most people only need long-term care for only a few years, this should cover most likely scenarios.

But this doesn't help in the situation proposed by the OP.  Your home's paid for -- good.  Say your spouse becomes ill, needs nursing home care, and you use the house for his expenses.  But you're still healthy and have years of life left ahead of you. Where do you live, and what happens when you need the same care? 

My husband jokes that he has the good end of our situation:  I'm younger than he is, and I'm in better health and come from a long-lived family.  When he's old and sick, the likelihood is that he will still have me to care for him at home.  I'm the one who'll have to search around for answers.

[ed1964]

exactly mrspete. That is the situation I am talking about. I have read there a ways to protect your assets, and get on medicare for this. Maybe a family trust or something.
I was wandering if anyone has done this or been thru it, so that if that I could prepair if need be. I am only 51 and in good health, but you never know when an accident could happen, or stroke, heart attack, ect.   

[lizzzi]

What I've seen in my home health and public health nursing career is that it is very difficult financially to be a young or younger family with one spouse having a long term serious disability. (Traumatic brain injury, spinal cord injury, Lou Gehrig's disease...multiple serious deficits from all kinds of accidents or other traumas, etc. Early Alzheimers, also. ) They usually end up spending down their assets to become eligible for Community Spouse Medicaid, which gets the care for the sick spouse and leaves some money for the well  spouse, and lets them keep the house and the car...but they aren't really left with enough money to run the house and a good car. Often the house is sold, the well spouse and the kids go into an apartment or mobile home at some point, and the well spouse drives a cheap car...some kind of beater. Once a person gets old enough for Medicare and then Social Security, things tend to get easier. And that combo of Medicare/Medicaid is a pretty good health insurance package...again, generally for the older population. Being young and seriously injured or getting a serious, chronic disease is a bleak scenario.

[mxt0133]

You can create a trust to put your assets in which will not count towards Medicaid qualification, but you loose control of those assets.  There is also a 5 year look back period, meaning if you suddenly need to go into a nursing home you can't just decide to put all your assets into a trust and then expect to qualify for Medicaid.  Any assets that you owned for the past 5 years counts for Medicaid eligibility, this includes gifting of assets.

Some people in this situation legally separate so that the spouse that is healthy can continue to earn income while leaving the sick spouse financially destitute to be able to qualify for Medicaid .

There are laws specifically for this situation preventing financial advisors or estate lawyers giving this type of advice.

Medicaid is intended to help people who cannot afford required medical expenses.  It is not meant to preserve generational wealth to be passed on the the next generation while leaving the tax payers to fund end of life care.

That being said you can always treat the family to Vegas before going into a nursing home.

[Retired To Win]

Thanks for replies. I know she receives same care because her roommate is on Medicaid and My grandmother was in the same place on Medicaid before she passed.
Her home and land was given to her children when her husband passed, so they will not be lost. I was just concerned if something happened while you where young, (i.e.
accident) and you needed nursing home. I would hate to leave my wife with that problem ,and go broke too. By the way I am in Arkansas.

One obvious solution has already been presented: get a longterm care insurance policy.  The younger you are when you get it, the lower your premiums.  And, yes, I and my wife both have such a policy.  Combined, the 2 policy premiums run $350 a month.  But you just stated that it's costing your relative $5000 a month to be taken care of.  IMHO, better to pay some now than a whole lot more later.

And... in order to get Medicaid to pick up the tab, you have to be basically asset-less, except for $2000 and your house.  So, it's "hasta la vista baby" to any stash you might have.

[lizzzi]

I think you'll find that the amount Medicaid lets you keep is higher than the $2000 mentioned above. (Still not much though.) The amounts change every year, so if it's relevant for you or your family, you need to stay abreast. And Community Spouse Medicaid does let the well spouse keep approx. $100,000. In terms of Medicaid divorces be careful about that. The court will need to then appoint a guardian to care for the impaired spouse...they will not generally allow the well spouse who divorced the sick spouse to be the caregiver anymore. Just some things to think about, and really points up that you need to consult knowledgeable lawyers about these issues. In terms of Long Term Care insurance, be very, very careful. It is not a panacea, by any means. One thing I've seen over the years as a home care nurse is that these insurance companies practically turn themselves inside-out trying not to pay. Also, companies have stopped their LTC programs because they aren't profitable enough, or have found ways to raise the premiums or make it extremely difficult to access services. I'm not telling you not to get LTC insurance...I'm just saying be ultra-careful, ultra-skeptical, and try to talk to people who have actually used it.

[Pigeon]

This is one situation where I think it is wise to consult with a lawyer.  Each state and each couple's financial situation is different.

[coppertop]

Medicaid is intended to help people who cannot afford required medical expenses.  It is not meant to preserve generational wealth to be passed on the the next generation while leaving the tax payers to fund end of life care.


This. 

People think it's okay to give the money to the family and then plead "poor" later on, so that they can receive government assistance and they won't have to pay for it themselves.  I don't want my tax dollars to be used to pay for a person's care who has hidden their wealth by passing it along to heirs. 

[Spork]

Medicaid is intended to help people who cannot afford required medical expenses.  It is not meant to preserve generational wealth to be passed on the the next generation while leaving the tax payers to fund end of life care.


This. 

People think it's okay to give the money to the family and then plead "poor" later on, so that they can receive government assistance and they won't have to pay for it themselves.  I don't want my tax dollars to be used to pay for a person's care who has hidden their wealth by passing it along to heirs.

This again.

Being libertarian, I'm not terribly fond of any income redistribution, though I don't see that it will ever go away and I am open for debate on some minimal, rational safety net.  However, where I draw the line is: "No welfare for rich people."

[Millennial-Mustache]

I am actually new to the forum, but I felt obligated to respond to this topic. My wife is an attorney in Texas, and her primary practice area is asset preservation for people seeking Medicaid. Her firm can usually keep a significant amount of money from going to a nursing home or the state. You should contact an attorney in or state - or message me if you are in Texas and I can pass her info along to you.

[Blonde Lawyer]

If your spouse qualifies for SSDI, they will qualify for Medicaid 2 years after becoming disabled regardless of assets, I think. So, SSDI could be used towards the LTC costs until Medicaid kicked in. 

Depending on your state, going the Medicaid divorce route may not help.  Your spouse would likely still get 50% of the assets and you might have to pay alimony towards the nursing home care too.

For the caretaker decision factor, one way around that is a POA that has an alternate named.  Then the alternate would make decisions for you after the medicaid divorce.

[Bob W]

The best defense for this is to be wealthy.   

Many people feel they are set for life at 1 million given the 4% rule.   At 5K per month we are looking at 60K.   Granted it would take some time to spend that down.

So yeah,  a minimum of 1 million with a paid off house and a spouse capable of earning money in the event one is in a nursing home.

Also remember that while many of us will end up in a nursing home the average stay is something like 90 days.   In many nursing homes in our area both people with long term mental illness and developmental issues (MR) are in nursing homes.   They may stay there decades.  So I'm thinking that realistically most folks are sub 40 days in nursing homes.   

In my private experience with father (1 day before they choked him to death),  mother (3 months, starved her),  grandmother (15 years Alzheimer's)  other grandparents were zero.

Mom had LTCI for many years.   Unfortunately she didn't have it inflation adjusted so it was still something like 2K out of pocket per month.  Her pension and SS was over that and she had no bills plus investment income so it worked out.   Then my siblings stole my inheritance but that is another story. 

My wife's father is struggling with this just now.   He retired at 50 with a 350K lump sum and has been living off that as an investment.  He now receives SS at age 74 so he has a cushion.

He keeps asking me how to shield his money as he has seen countless friends go down that route.   I just don't have the heart to tell him Medicaid is for poor people and that he should man up and pay the bill when it comes.    I guess I should advise him just to give us all the money to us since he didn't pay a dime in child support for my wife when she was growing up. 

[hybrid]

Medicaid is intended to help people who cannot afford required medical expenses.  It is not meant to preserve generational wealth to be passed on the the next generation while leaving the tax payers to fund end of life care.


This. 

People think it's okay to give the money to the family and then plead "poor" later on, so that they can receive government assistance and they won't have to pay for it themselves.  I don't want my tax dollars to be used to pay for a person's care who has hidden their wealth by passing it along to heirs.

This again.

Being libertarian, I'm not terribly fond of any income redistribution, though I don't see that it will ever go away and I am open for debate on some minimal, rational safety net.  However, where I draw the line is: "No welfare for rich people."

I get what you're saying and appreciate the point, however, the game we play in America is based on the fact that we do not have a very good social safety net in regards to health care and people have become incentivized to game the system. In America the best answer is always don't get sick, after that the best answer is to hide your wealth.

Perhaps one of these days we will come to the same realization some other nations have and understand that a lot of people will in fact get very sick and it's all one gigantic lottery. Better to pay into a system upfront and have peace of mind should the unfortunate yet very common happen.

 So yes, the best way to avoid losing your wealth in old age is to have a lot of it. However, this is not an option for a great many people. And since a great many people will never be wealthy, better to have everyone pay into a stronger social safety net than a minimal one. If you pay into it for decades and never leverage it, consider yourself blessed. Rather like every private insurance vehicle, the last thing you ever want to do is actually leverage the policy. We should think of healthcare the same way.

[Spork]

Medicaid is intended to help people who cannot afford required medical expenses.  It is not meant to preserve generational wealth to be passed on the the next generation while leaving the tax payers to fund end of life care.


This. 

People think it's okay to give the money to the family and then plead "poor" later on, so that they can receive government assistance and they won't have to pay for it themselves.  I don't want my tax dollars to be used to pay for a person's care who has hidden their wealth by passing it along to heirs.

This again.

Being libertarian, I'm not terribly fond of any income redistribution, though I don't see that it will ever go away and I am open for debate on some minimal, rational safety net.  However, where I draw the line is: "No welfare for rich people."

I get what you're saying and appreciate the point, however, the game we play in America is based on the fact that we do not have a very good social safety net in regards to health care and people have become incentivized to game the system. In America the best answer is always don't get sick, after that the best answer is to hide your wealth.

Perhaps one of these days we will come to the same realization some other nations have and understand that a lot of people will in fact get very sick and it's all one gigantic lottery. Better to pay into a system upfront and have peace of mind should the unfortunate yet very common happen.

 So yes, the best way to avoid losing your wealth in old age is to have a lot of it. However, this is not an option for a great many people. And since a great many people will never be wealthy, better to have everyone pay into a stronger social safety net than a minimal one. If you pay into it for decades and never leverage it, consider yourself blessed. Rather like every private insurance vehicle, the last thing you ever want to do is actually leverage the policy. We should think of healthcare the same way.

Then I'd say by your own explanation: you buy insurance.

But my point there was really not about "how much safety net should we have."   My point was It was: No welfare for rich people.  Hiding your money to pull someone else's money from the system really sort of ooks me out.  It seems dishonest.   And "No welfare for rich people" really does seem like an appropriate appeal that both the Left and the Right should have no problem buying into.

[Pigeon]

From what I am seeing with the elderly in my life isn't the fear of losing one's own wealth or the loss of passing wealth to the next generation. It is the very real fear of leaving your spouse impoverished at a time in their lives when they can't go back to work themselves.

The average nursing home stay for a current patient is about 2.5 years and about 9 months for a discharged patient.

[mikefixac]

Also don't discount the other option. It may be abhorrent to some but a choice to die rather than waste away in a room is something that may or may not appeal to any individual.

Agreed. Not abhorrent at all. I think our social mores will be changing in regards to end of life issues soon.

Maybe I'm a big talker now, but if my life ends up like people I know of now, I would not hesitate on how to end my life. We as a society needs to look at this honestly and not let superstition dictate how we die.

[bogart]

From what I am seeing with the elderly in my life isn't the fear of losing one's own wealth or the loss of passing wealth to the next generation. It is the very real fear of leaving your spouse impoverished at a time in their lives when they can't go back to work themselves.

I concur, this is the concern.  Count me among those not interested in preserving assets for the next generation.  But I did read up on the laws in my state, and the short version is that the "community spouse" (the one continuing to live independently) can keep (a) the house; (b) all their own income, e.g. earned or from a pension; (c) if they don't have an income in their own name, up to ~$2k/month of their spouse's income (e.g. if I am the community spouse but my household's income is my institutionalized spouse's pension or social security, I get $2K/month to cover my living expenses and no more), and (d) up to $109K in other assets, including retirement accounts.

It's (d) that seems particularly problematic, in this era in which pensions are increasingly rare.  So -- if you own your home, you can keep it, but even if you and your spouse have worked your whole lives and each have, let's say, $500K in your own individual 401K -- a $1 mil 'stache -- (or the equivalent in rental properties, or whatever), you lose all of what's in your name (as well as access to all of what's in your spouse's) except that $109K you're allowed, leaving you -- if you are applying the 4% SWR rule -- with $4.4K/year to live on.  Not peachy.

[lizzzi]

No, Community Spouse Medicaid is not peachy. My husband was 25 years older than I, and making sure that he got good care at his end-of-life, while not impoverishing me in my own old age was always going to be an issue. Since he was adamantly against assisted living or nursing home placement anyway, the plan was always to keep him home no matter what, with home care provided by me and by whatever aides I needed to hire. A lot of the stash went for private-pay full time home aides the last couple of years...then family helped me care for him for 17 months towards the end, and the last four months of his life it was Hospice at home (100% Medicare-billed, by the way...a godsend financially)--a private-pay aide for just a few more hours than Hospice could provide, and a family member coming over every night to help me put him to bed. It was really difficult...caregiving will do you in...but he got to stay home and I was exhausted but never impoverished. The stash is not what it would have been if he had dropped dead of a sudden heart attack, but even with those last three years or so of paying aides, I am good to go for my own old age. And it's hard to put a price tag on the fact that he was still sitting in the sun and being wheeled through the park a week before he died...the Hospice nurse commented that he never would have had that quality of life if we had placed him.

[MrsPete]

One obvious solution has already been presented: get a longterm care insurance policy.  The younger you are when you get it, the lower your premiums.  And, yes, I and my wife both have such a policy.  Combined, the 2 policy premiums run $350 a month.  But you just stated that it's costing your relative $5000 a month to be taken care of.  IMHO, better to pay some now than a whole lot more later.

The problem here is that these policies are not as easy to find as they used to be, and a person searching for such a policy would be fortunate to find a $350/month policy.  You know, insurance agencies don't build all those big expensive buildings and place those expensive commercials on TV by promoting policies that pay out more than they take in. 

Then look at the math:  You're paying $4200/year ... if you pay into that policy 20 years before you need it, you'll have paid in $84,000 over the years ... money, which if you'd kept it, could've paid for 10-15 years of care.  And if you end up NOT needing care, you don't have the money available to you for other things (or to leave to your heirs). 

It's not an easy decision. 

[MrsPete]

The best defense for this is to be wealthy.   

Or very poor.  Either way, you're okay -- it's those of us in the middle who will struggle with this issue. 

So yeah,  a minimum of 1 million with a paid off house and a spouse capable of earning money in the event one is in a nursing home.

More likely your spouse is close to your own age and won't be willing/able to go back to work, so realistically -- for this scenario to work --  you'd need two million.  One for each spouse.  Or, you could argue that the first spouse would spend down the money and the second spouse would sell the paid-for house to cover his or her medical needs. 

[TrMama]

From what I am seeing with the elderly in my life isn't the fear of losing one's own wealth or the loss of passing wealth to the next generation. It is the very real fear of leaving your spouse impoverished at a time in their lives when they can't go back to work themselves.

I concur, this is the concern.  Count me among those not interested in preserving assets for the next generation.  But I did read up on the laws in my state, and the short version is that the "community spouse" (the one continuing to live independently) can keep (a) the house; (b) all their own income, e.g. earned or from a pension; (c) if they don't have an income in their own name, up to ~$2k/month of their spouse's income (e.g. if I am the community spouse but my household's income is my institutionalized spouse's pension or social security, I get $2K/month to cover my living expenses and no more), and (d) up to $109K in other assets, including retirement accounts.

It's (d) that seems particularly problematic, in this era in which pensions are increasingly rare.  So -- if you own your home, you can keep it, but even if you and your spouse have worked your whole lives and each have, let's say, $500K in your own individual 401K -- a $1 mil 'stache -- (or the equivalent in rental properties, or whatever), you lose all of what's in your name (as well as access to all of what's in your spouse's) except that $109K you're allowed, leaving you -- if you are applying the 4% SWR rule -- with $4.4K/year to live on.  Not peachy.

If this is the case, it would probably make sense to buy the most expensive home you could manage and then sell it after your spouse has passed. That would leave the surviving spouse with more stash to live off of. Of course, this plan is full of pitfalls.

As for my own plans, I will never, ever go into a nursing home. I have a firm plan to end my own life long before that. If I ever get to the point of having a DNR, it will specify that food, water and IV fluids aren't to be given either. I'm in the process of watching my grandma pass away in a nursing home. Even though she's got lots of stash to pay for a nice place, they still treat the residents horribly. My parents thought they picked a good place, turns out they just have a good salesperson. I've come to the conclusion that if you want good care, you'd need to pay for private nursing in your own home so you can weed out the aids/nurses who don't treat you well.

[lizzzi]

The problem with Medicaid letting you keep your home is that they don't leave you enough money to afford the monthly bills, maintenance, updates, repairs, etc. The strategy of buying an expensive home to preserve it from Medicaid may backfire on you (global you...not you personally). You could buy an expensive car, too, if you wanted. But it will cost more in maintenance and repair, and that may be where you get bitten in the toe.

[Drifterrider]

My wives grandmother has recently been put in nursing home after a stoke. It is costing her $5000 per month. They saved for years, and now it is going fast. Her husband passed 10yrs. ago and she is 92, so it is not a big deal if it all goes. I was concerned though, what if me or my wife had an accident and had to go into one earlier. I want to protect what we have for the other spouse. My wives grandmother receives the same care as the people who had no money and Medicaid is paying their way. I think it is unfair that she is penalized because they saved. Any advise would be great. Thanks

1.  First:  Your wife's grandmother is not being "penalized"; she is paying her way.  It is not the nation's responsibility to pay for someone who can support themselves.

2.  Your wife's grandmother being able to pay might have made the difference in her being able to get into a facility (or a better facility).

3.  Medicare does not pay for nursing home care (most cases).

4.  Medicaid pays for those who are poor and many nursing homes have only a few spaces available for Medicaid patients.  The rules (including the five year look back provision) can vary from state to state.  In short, if you have any control at all over anything you have put into a trust, it isn't shielded from Medicaid.  In practical terms this means if you are rich and give all your money away in order to qualify for Medicaid, you still wouldn't qualify for Medicaid for five years after you gave your money away. 

5.  GET THEE TO AN ELDERCARE ATTORNEY!!!!!!!!!!!!!!!

Eldercare attorney's specialize is helping you prepare for the unknown.  They can help you preserve your assets both for  yourself and from yourself (and spouse/children/parents/etc).  They specialize in knowing the rules for medicare (a health insurance policy) and Medicaid (medical care for the poor). 

It is never too early to plan for getting old/sick but it is often far too late. 

PPPPPP (proper planning prevents piss poor performance)

[lizzzi]

Medicaid is health insurance for people at or below a certain level of income and assets. It isn't welfare, it isn't public assistance...it takes away from proud people's dignity to say it is for "the poor." There are a lot of elderly people on Medicaid who were hard workers their whole lives...maybe have no pensions or small Social Security checks. I know it's just semantics, but it is safer in terms of etiquette to use softer terms. Maybe you have friends with an adult disabled son or daughter on Medicaid for blindness, multiple sclerosis, whatever. It's best to just refer to Medicaid as their health insurance...because it is.

[CommonCents]

Medicaid is health insurance for people at or below a certain level of income and assets. It isn't welfare, it isn't public assistance...it takes away from proud people's dignity to say it is for "the poor." There are a lot of elderly people on Medicaid who were hard workers their whole lives...maybe have no pensions or small Social Security checks. I know it's just semantics, but it is safer in terms of etiquette to use softer terms. Maybe you have friends with an adult disabled son or daughter on Medicaid for blindness, multiple sclerosis, whatever. It's best to just refer to Medicaid as their health insurance...because it is.

Except people qualify based on income or asset tests, so "poor" while not necessarily diplomatic, is accurate enough in shorthand that I wouldn't think on this blunt, no holds barred forum, that people would get that hepped up.

[frugalecon]

One obvious solution has already been presented: get a longterm care insurance policy.  The younger you are when you get it, the lower your premiums.  And, yes, I and my wife both have such a policy.  Combined, the 2 policy premiums run $350 a month.  But you just stated that it's costing your relative $5000 a month to be taken care of.  IMHO, better to pay some now than a whole lot more later.

The problem here is that these policies are not as easy to find as they used to be, and a person searching for such a policy would be fortunate to find a $350/month policy.  You know, insurance agencies don't build all those big expensive buildings and place those expensive commercials on TV by promoting policies that pay out more than they take in. 

Then look at the math:  You're paying $4200/year ... if you pay into that policy 20 years before you need it, you'll have paid in $84,000 over the years ... money, which if you'd kept it, could've paid for 10-15 years of care.  And if you end up NOT needing care, you don't have the money available to you for other things (or to leave to your heirs). 

It's not an easy decision.

My father is now in a dementia-care facility, and we are grateful that he made the decision 16 years ago to buy a LTC policy. He was an insurance broker by trade, and he was always concerned about risks. (He didn't really understand risk in an investment context, but that is a separate issue.) His goal was definitely to prevent my mother from being impoverished, and the LTC policy is likely to accomplish that. But I am sure the insurance company regrets selling the policy. His monthly premium was only a little more than what his daily benefit is, and he will get back every penny he paid in premiums in the first 8 months of claims. Obviously he could have invested the premium, but he would have swung for the fences rather than choosing a low-cost index fund portfolio. This is a better solution.

My parents always said that they would NEVER put each other in a facility. That was a good aspiration, but once dad couldn't toilet, or sleep nights, or cooperate, it was unmanageable. There are situations where there is just no choice. And it is possible to get good care in an institutional setting.

[beltim]

Medicaid is health insurance for people at or below a certain level of income and assets. It isn't welfare, it isn't public assistance...

To add to what Commoncents said, these two statements are contradictory.  Medicaid is a publicly funded program to assist people paying the cost of medical care that they otherwise wouldn't be able to afford.  How is that not public assistance?  It seems to be the very definition of public assistance to me, and I say that as someone who strongly supports Medicaid.

[Drifterrider]

Medicaid is health insurance for people at or below a certain level of income and assets. It isn't welfare, it isn't public assistance...it takes away from proud people's dignity to say it is for "the poor." There are a lot of elderly people on Medicaid who were hard workers their whole lives...maybe have no pensions or small Social Security checks. I know it's just semantics, but it is safer in terms of etiquette to use softer terms. Maybe you have friends with an adult disabled son or daughter on Medicaid for blindness, multiple sclerosis, whatever. It's best to just refer to Medicaid as their health insurance...because it is.

Medicaid is NOT health insurance anymore than SNAP is a healthy meal program.  Medicaid is funded from the General Fund of the congress which is administered by the states (unlike Medicare which IS a health insurance policy).  The federal government uses the term poor when they qualify people living at or below the Federal Poverty Level.  Poor means having no money/assets.  I prefer to be thought of as under-height for my weight but the fact remains; I'm fat. 

[CommonCents]

Medicaid is health insurance for people at or below a certain level of income and assets. It isn't welfare, it isn't public assistance...

To add to what Commoncents said, these two statements are contradictory.  Medicaid is a publicly funded program to assist people paying the cost of medical care that they otherwise wouldn't be able to afford.  How is that not public assistance?  It seems to be the very definition of public assistance to me, and I say that as someone who strongly supports Medicaid.

btw, here's what the Medicaid program in my state is defined as a state contract: "the medical assistance and benefit programs (Medicaid) administered by the Executive Office of Health and Human Services"

ETA: Here's another definition in another contract:  "The medical assistance and benefit programs administered by the Massachusetts Executive Office of Health and Human Services pursuant to Title XIX of the Social Security Act, Section 1115 demonstration, M.G.L. c. 118E, and other applicable laws and regulations (Medicaid)."

[mxt0133]

Someone found a solution to this problem:

http://www.newser.com/story/210765/healthy-75-year-old-ends-her-life-so-she-wont-grow-old.html?utm_source=part&utm_medium=usatoday&utm_campaign=syn

[Dances With Fire]

From what I am seeing with the elderly in my life isn't the fear of losing one's own wealth or the loss of passing wealth to the next generation. It is the very real fear of leaving your spouse impoverished at a time in their lives when they can't go back to work themselves.

I concur, this is the concern.  Count me among those not interested in preserving assets for the next generation.  But I did read up on the laws in my state, and the short version is that the "community spouse" (the one continuing to live independently) can keep (a) the house; (b) all their own income, e.g. earned or from a pension; (c) if they don't have an income in their own name, up to ~$2k/month of their spouse's income (e.g. if I am the community spouse but my household's income is my institutionalized spouse's pension or social security, I get $2K/month to cover my living expenses and no more), and (d) up to $109K in other assets, including retirement accounts.

It's (d) that seems particularly problematic, in this era in which pensions are increasingly rare.  So -- if you own your home, you can keep it, but even if you and your spouse have worked your whole lives and each have, let's say, $500K in your own individual 401K -- a $1 mil 'stache -- (or the equivalent in rental properties, or whatever), you lose all of what's in your name (as well as access to all of what's in your spouse's) except that $109K you're allowed, leaving you -- if you are applying the 4% SWR rule -- with $4.4K/year to live on.  Not peachy.

Thanks bogart...This is great information for anyone following this thread!! Everyone should do some homework and get good legal advice when needed.

[lizzzi]

Well, OK regarding the Medicaid semantics.....but in caring for a caseload for 20 years where each and every patient had Medicaid....or in trying to get a very proud but needy person to apply for Medicaid so they'd have a billing mechanism for services ....it was just more polite and less in-their-face to refer to Medicaid as "health insurance for a certain level of income." Or "health benefits at a certain level of income." The important thing was that they got the help they were entitled to...and some people wouldn't touch it with a bargepole if they considered it "welfare."

Of course MMMers can handle the word "poor" on the forums, but I spent many years out in the field face-to-face with low income people who needed health care. Obviously I was not as pithy talking to them as we can be on the forums.

[hdatontodo]

What does the govt do if you get divorced before going into a nursing home?

[lizzzi]

Some states and counties are more lenient than others about closing their eyes to suspected "Medicaid divorces." Others will go after you to recover funds if they think you have divorced to get Medicaid for the ill spouse and avoid fiscal responsibility. I've been told that it is harder and harder to get off the financial hook by divorcing your sick spouse. I would definitely make sure you have a knowledgeable attorney on this one.

In reading about Medicaid related to Obamacare on another thread, it looks like Medicaid is changing as we speak. It's more important than ever to stay current on the regulations, and on how they are applied in your area.

[Genevieve]

Long term care insurance takes care of long term care. But there are also disability insurance policies that cover if you are unable to work. This would alleviate your concern of getting sick at a young age.

[MrsPete]

My parents always said that they would NEVER put each other in a facility. That was a good aspiration, but once dad couldn't toilet, or sleep nights, or cooperate, it was unmanageable. There are situations where there is just no choice. And it is possible to get good care in an institutional setting.

Yeah, never say never -- we can't know what might befall us.  I think it is fair, however, to say that you'd never put a loved one "in a home" unless it was the last resort.  Home health can bridge a pretty big gap. 

Medicaid is health insurance for people at or below a certain level of income and assets. It isn't welfare, it isn't public assistance...it takes away from proud people's dignity to say it is for "the poor." There are a lot of elderly people on Medicaid who were hard workers their whole lives...maybe have no pensions or small Social Security checks. I know it's just semantics, but it is safer in terms of etiquette to use softer terms. Maybe you have friends with an adult disabled son or daughter on Medicaid for blindness, multiple sclerosis, whatever. It's best to just refer to Medicaid as their health insurance...because it is.

Aren't you meshing Medicaid and Medicare together? 

[Blonde Lawyer]

For all the people saying they would just commit suicide, keep in mind that you are then voiding any life insurance benefits you have.  If you were still working and still saving up your stash your spouse might need that life insurance policy.

[lizzzi]

MrsPete, no I don't think I'm meshing Medicare and Medicaid...although some people do have both. I think I got into trouble on this thread by referring to Medicaid as a type of low income health insurance..of course, strictly speaking, it isn't...but it's a tactful, euphemistic way of making it more acceptable to patients and families who hate the thought of being "on welfare."

[mxt0133]

For all the people saying they would just commit suicide, keep in mind that you are then voiding any life insurance benefits you have.  If you were still working and still saving up your stash your spouse might need that life insurance policy.

There are insurance policies that still pay out after being insured for two years or a set waiting period.  I specifically asked that of mine and they said after two years and I decided to commit suicide it would pay out in full.  Just saying.

[dude]

For all the people saying they would just commit suicide, keep in mind that you are then voiding any life insurance benefits you have.  If you were still working and still saving up your stash your spouse might need that life insurance policy.

There are insurance policies that still pay out after being insured for two years or a set waiting period.  I specifically asked that of mine and they said after two years and I decided to commit suicide it would pay out in full.  Just saying.

Yep, mine pays out for suicide, too, only at a lower rate (there are two figures for an insurance award, one for "accidental" death, the other for "non-accidental" death).  And good thing to, since 14 of my co-workers nationwide have committed suicide this year . . .

I have an LTC policy, so won't have to resort to this.

[Blonde Lawyer]

For all the people saying they would just commit suicide, keep in mind that you are then voiding any life insurance benefits you have.  If you were still working and still saving up your stash your spouse might need that life insurance policy.

There are insurance policies that still pay out after being insured for two years or a set waiting period.  I specifically asked that of mine and they said after two years and I decided to commit suicide it would pay out in full.  Just saying.

Yep, mine pays out for suicide, too, only at a lower rate (there are two figures for an insurance award, one for "accidental" death, the other for "non-accidental" death).  And good thing to, since 14 of my co-workers nationwide have committed suicide this year . . .

I have an LTC policy, so won't have to resort to this.

Wow, I didn't know any policy paid out for that.  I thought the provision was "void for public policy reasons." Good to know.  Dude, what field are you in out of curiosity?

[iris lily]

Are you sure she's receiving the same degree of care?  I've heard the care provided through Medicaid is not as good as that provided through private pay.

...

Depends entirely on the facility. Some don't take Medicaid patients.

In my mom's nursing home, the only difference was that Medicaid will not pay for a single room. There may be incidentals that are different, but the nursing care and food are the same as private pay. My mom was private pay all the way, but we were watching her assets deplete. Fortunately, they lasted until she died and there were bits leftover.

[iris lily]

Medicaid is intended to help people who cannot afford required medical expenses.  It is not meant to preserve generational wealth to be passed on the the next generation while leaving the tax payers to fund end of life care.


This. 

People think it's okay to give the money to the family and then plead "poor" later on, so that they can receive government assistance and they won't have to pay for it themselves.  I don't want my tax dollars to be used to pay for a person's care who has hidden their wealth by passing it along to heirs.

but but but...but! You have paid into "the system" all of these years!!!! Now it's your time to get what is yours.

Or that's how the counter refrain goes. I actually heard this refrain from two adult humans not too long ago. I give up, the "gimmee gimmee gimmee" mentality is rife in our society and that's why the governments spending will never get under control.

We were lucky, I'll admit it, that my mother died in her nursing home before all of her assets ran out. But we were highly aware of what the end COULD be and didn't try to cheat the system. She was about a year away from exhausting her money.

I don't have LTC, we have assets instead. My goal is to Die Broke, I don't care about passing anything on although I do not want to bankrupt my spouse. For a time my plan was to divorce DH when I come down with Alzheimer's so that he is not impoverished. Take my half of our stash, and walk into the nursing home (figuratively speaking.) But now, I can see that my income will cover half the costs and  my share of our assets will cover the other half for ten years. Not a big problem, I won't live ten years in a nursing home. And if he happens to die first, which is unlikely, I'll have ALL of our assets to play with and I will be fine.

[iris lily]

From what I am seeing with the elderly in my life isn't the fear of losing one's own wealth or the loss of passing wealth to the next generation. It is the very real fear of leaving your spouse impoverished at a time in their lives when they can't go back to work themselves.

I concur, this is the concern.  Count me among those not interested in preserving assets for the next generation.  But I did read up on the laws in my state, and the short version is that the "community spouse" (the one continuing to live independently) can keep (a) the house; (b) all their own income, e.g. earned or from a pension; (c) if they don't have an income in their own name, up to ~$2k/month of their spouse's income (e.g. if I am the community spouse but my household's income is my institutionalized spouse's pension or social security, I get $2K/month to cover my living expenses and no more), and (d) up to $109K in other assets, including retirement accounts.

It's (d) that seems particularly problematic, in this era in which pensions are increasingly rare.  So -- if you own your home, you can keep it, but even if you and your spouse have worked your whole lives and each have, let's say, $500K in your own individual 401K -- a $1 mil 'stache -- (or the equivalent in rental properties, or whatever), you lose all of what's in your name (as well as access to all of what's in your spouse's) except that $109K you're allowed, leaving you -- if you are applying the 4% SWR rule -- with $4.4K/year to live on.  Not peachy.

Yes, the rules about what the non-sick spouse can keep are f*cked up. It should be straight up 1/2 of the estate. period.