By: Michael Gunning
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Elder Care: 3 Ways to Help Your Family Pay
Medicare is the federal health insurance program offered by our government to help older adults pay for doctor or hospital bills when they are having trouble financially. Nevertheless, it won’t cover everything. Long-term elder care tasks which help daily living activities such as bathing, dressing, and eating, are not covered under the plan. Unfortunately, there can also be several other uncovered costs.
These costs can be destructive to your savings if you do not have a strategy in place. This situation is particularly challenging as people are now aging faster than ever before. So, what can you do to cover the most troublesome of medical expenses for yourself or another older member of your family? Read the rest of our article to uncover some of the ways you can prepare.
- Much of the population will require some form of eldercare at some point, but not many can really afford the soaring costs.
- To be able to qualify for Medicaid, seniors will need to meet or fall below a certain level of income.
- Seniors can set up an irrevocable trust or even gift assets to a child or other member of your family.
- Additional options include annuities, a pooled trust, or a personal care agreement.
- If all else fails, a senior’s spouse may sign a spousal refusal.
The Rising Costs of Elder Care
Numerous older folks will ultimately need eldercare—possibly because of a physical or mental deficiency—and they and their families will have to find a way to compensate for this. Sadly, it is rarely inexpensive. In fact, it can rapidly erase a person’s entire life savings. A semi-private room in a nursing facility within the United States costs an average of $247 a day, or $7,513 a month, according to the 2019 survey about the costs of care from long-term care planning company Genworth. The site said private room averages $280 a day, or $8,517 a month.
For folks that don’t need the level of care that a nursing home provides, a one-bedroom unit in an assisted living community runs about $133 a day, or $4,051 a month. Home health aides for people who can remain in their own homes but still need a fair amount of help can cost as much as $23.00 an hour. These are just averages of course, but in high-cost areas such as New York, these bills will run much higher.
Private long-term care insurance is another way to handle some of these costs, though this too will be expensive and is not intended for everyone. However this is also generally the most cost-effective if purchased before you reach age 60.
Asset Protection Trusts Can Help Pay for Elder Care
When established correctly, an irrevocable trust can be an additional method of sheltering assets so that you will not affect your Medicare eligibility. An irrevocable trust, which is used to transfer assets to the control of a trustee, essentially removes them from the older individual’s control. This means that once created, this kind of trust cannot be modified or broken without the beneficiaries’ consent.
This contrasts with a revocable trust, in which a person retains their right to change the agreement. Revocable trusts, also referred to as revocable living trusts, do have their uses, but qualifying for Medicaid isn’t one of them.
We’ve linked to the following helpful resource to help you get an idea of average nursing home costs in your area. This includes average rates for both private and shared living situations.
Contact Moulton Law Offices at any time to discuss additional ways that you can begin strategizing methods to pay for the rising cost of assisted elder care. Or checkout our other articles on Elder Care here.