Mom Is Entering A Nursing Facility, Can We Still Get Her Some LTC Insurance?

It is often a very sudden thing when we realize a loved one needs care in a long term care (LTC)  facility.  Sometimes it is within hours of a hospital discharge, other times we may have a day or two of advance notice.  This can be a very tough thing to do if there has been no advance investigating of available facilities.  Some specialize in dementia, others are designed for those who at cognitive and somewhat ambulatory.

Then you learn the cost of facility care.  Nursing homes often run $8000 a month in Wisconsin outside of Milwaukee and Madison.  Assisted living or CBRF’s may start around $3000 a month but the cost escalates depending on the cares required.  If your loved one does not have LTC insurance, the assets may be used up in a very short time.

Once a person requires LTC services it is too late to purchase LTC insurance as they have already met the requirements to be on claim.  However, all is not lost.  There are alternatives that can help even if care is already being received.

If the loved one or spouse is a veteran, there is a needs based program called Aid and Attendance which may help with some of the costs.  Check with your local VA office to see if your loved one qualifies.  In addition to this is another government program open to any resident called Medicaid.  It is also a needs based program and assets must be “spent-down” to very low levels to qualify.  A single person can retain only $2000 of assets including the house, car, IRA, investments, etc.  They can keep $45 a month from any income source(s) for income, and must cash in any life insurance they own if the face amount is over $1500.  If any money was given away in the past 60 months, a penalty period will be imposed before Medicaid is available.

In many areas, Medicaid means you will be in a nursing home, even if that level of care is not required (this is just one of the reasons to consider LTC insurance while still healthy).  At death, the $2000 may go back to the Medicaid program leaving literally nothing available to pay for the funeral.  Often adult children pool their available savings to pay for funeral expenses.  This can be avoided if the person requiring care has set aside money for funeral expenses in an irrevocable burial trust (IBT).

The IBT can hold up to $15,000, even if that person is already in care and spending down.  In addition to their own IBT, the same type of fund can be established for each of the children and the spouses of those children.  The IBT (for self or children) does not count as a gift and there is no 5 year look-back or penalty period.  If there are 4 married children, an additional $120,000 can be protected for burial expenses in addition to the $15,000 for the person needing care.

There are even more ways to protect funds, or make the money last to pay the bills for LTC.  It is best to consult with an expert in this area to learn what you can do.  Call Romeo Raabe at (920) 884-3030 or (800) 219-9203 to arrange a meeting and investigate what your options are.

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