WELCOME TO OUR LONG TERM CARE

ASSET PROTECTION

CLASS

Presented by

ESTATE PLANNING & ELDER LAW SERVICES, P.C.

WHY SHOULD I

CARE ABOUT LONG TERM CARE?

Persons aged 65 to 69 years face a 1 in 2 risk of entering a nursing home.1

1 House Select Committee on Aging

WHY SHOULD I

CARE ABOUT

THE COSTS OF

LONG TERM CARE?

•The average monthly cost of “attendant” nursing care in Michigan for 2008 is $6,191.00.1 Skilled nursing care can be three times as much.

1 MI Department of Human Services

WHAT DOES LONG TERM CARE COST?

AREN’T NURSING

HOME COSTS

PAID BY MEDICARE

OR MEDICAL

INSURANCE?

• If discharged from a hospital, Medicare only covers “skilled” nursing care costs for up to 100 days, so long as skilled care is required

•20 days are covered at 100%, but you are required to pay a co-payment for the next 80 days unless your Medigap policy pays for the deductible

•Benefit renewable via the “60 day/3 day”rule

•Medical Insurance does not pay for Nursing Home care

Pros

• Covers assisted living and in-home care, not just nursing home care

• Provides most flexibility

• Prevents loss of assets with least complications

Cons

• Eligibility requirements

• Cost prohibitive• Loss of investment/

premiums if not used

• Strength of insurance company

If you can afford it - get it!

EVALUATING LONG TERM

CARE INSURANCE

WITHOUT LTC

INSURANCE CAN I

PROTECT MY ASSETS

FROM LTC COSTS?

• In most cases, by planning ahead, you can shield a substantial percentage of your assets from the cost of long term care.

•Planning ahead requires the creation of a flexible estate plan including, at a minimum, “Medicaid friendly” Financial and Medical Powers of Attorney. Sometimes action is required now versus later.

WHAT IS MEDICAID?

•Medicaid is a Federal Program established by the Social Security Act.

•Medicaid exists to ensure the availability of essential healthcare services, including Nursing Home Care, for people meeting certain income and asset requirements.

MEDICAID ELIGIBILIT

Y RULES

The rules for Medicaid eligibility differ somewhat depending upon whether the applicant is single or married.

However, for both married and single applicants, to become Medicaid eligible three tests must be met:

• Needs/“Seven Doors” Test• “Countable” Income Test • “Countable” Asset Test

CAUTION!

ELIGIBILITY RULES JUST CHANGED!

On 2/8/06 President Bush signed into law the Deficit Reduction Act of 2005. Michigan’s DHS implemented these and other substantial changes throughout 2007.

BECOMING MEDICAID

ASSET ELIGIBLE

If an applicant meets the income eligibility rules for Medicaid, asset eligibility can often be achieved by:

•Strategic gifting •Transforming

countable assets into exempt assets

•Transforming countable assets into unavailable assets

•Utilizing Medicaid Type A or B Trusts & SBO Trusts

•Maximizing the Community Spouse’s PSA