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How Will I Pay For Future Long-Term Care Costs?

Tara Frame
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October 19, 2017

One of the greatest concerns for the elderly or families with elderly parents is how to pay for long-term care. Two-thirds of seniors will need care at some point in their lives, and many have not planned for this likelihood. It is an emotional and sometimes unpleasant topic to broach, but it is a topic that every family should discuss, as there are many options if proper planning is done ahead of time.

Plan Ahead

According to the Centers for Disease Control, the average life expectancy at birth in the U.S. is approximately 79 years and is projected to continue to rise. Someone already 55 years of age has a higher life expectancy of around 84 years. Since health declines as we age and we become more likely to need help with everyday activities, it is smart to consider what options will be available if and when assistance is needed. Thinking about these things now helps people avoid making bad decisions during more stressful times when health has already declined to the point of needing assistance.

Care Options

Depending on their need for assistance, there are several different levels of care available to elders as they age. These are the 2017 Maryland averages, based on a Genworth 2017 cost-of-care survey.

·         Adult Day Care: $20,544 per year

·         Private In-Home Care: $20 to $21 per hour. The annual cost depends on what level of care is required

·         Assisted Living Facility: The national average is $48,000 per year

·         Nursing Homes: The national average annual cost of nursing homes is $120,450 for a semiprivate room or $127,750 for a private room, and the average nursing home stay is 835 days, or more than two years

Payment Options

Private Pay: If you are financially fortunate or lucky enough to have saved enough money, you may have the option of privately paying for your long-term care.

Long-Term Care Insurance: Long-term care insurance policies reimburse policyholders a daily amount (up to a preselected limit with most having a maximum benefit period of two, three or five years and a maximum lifetime benefit) for services to assist them with activities of daily living, such as bathing, dressing, or eating.

Medicare: If an individual has spent at least three days in a hospital for medically necessary care, Medicare will pick up the tab for up to 100 days of convalescent care immediately following discharge, as long as the patient goes to a home that's a Medicare-certified, skilled nursing facility. Even so, the patient is responsible for paying $164.20 per day after day 20.

Medicaid: In order to qualify for Medicaid, an individual must spend down their cash and life savings to $2,500. If any money or property is transferred to a family member or any other gifts are made within five years prior to applying for Medicaid, those transfers or gifts will prevent the individual from qualifying for Medicaid.

Benefits of Proactive Planning

By planning early and before the need for nursing home care is imminent, there are many benefits, including:

·         Providing you with the choice as to what type of care you will receive and where

·         Protecting the family home from estate recovery by Medicaid

·         Preserving money and resources for a healthy spouse who does not yet need nursing home care

·         Making it possible for you to pass on a legacy to your family

·         Protection of certain tax benefits


Determining the appropriate level and type of care is one of many challenges facing seniors and their loved ones. Other challenges include figuring out how to pay for the care, knowing what rights the senior has, understanding what Medicare will and won’t pay, and making sure that the right legal documents are in place to carry out the seniors’ wishes. To ensure that your plan will work as intended, it is best to plan early. Even if nursing home care is imminent, with proper legal planning and by taking a comprehensive look at your situation to determine your best course of action, there may be options available to protect you and your family’s home and life savings.

To secure assistance for you or your family, contact Tara K. Frame of Frame & Frame Attorneys at Law at 410-255-0373.

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