Each of us, I’m sure, has wondered, what will happen when we can no longer sprint up the steps (or in my case, stairs) to the front door. What if we forget what we’ve taken for medication – time after time? What do we do? Who do we call? Much as we hate to say it out loud – who will care for us? And how will they get paid?
In a recent issue of a magazine called Maine Seniors, there was an article about long-term care. It was a clear, informative report on this topic – the best I’ve seen. I wanted to share it, so I contacted the publisher and got permission.
We all want to stay at home, as long as we can afford to and are healthy enough. When we can no longer care for ourselves, depending on our health care needs, some may stay at home and receive at-home care, either from family, friends or paid caregivers. Long-term care may also be at an assisted living center, Alzheimer’s care facility or a nursing home.
The cost for long-term care at home could go from zero (if provided by family or friends) to $10,000 per month with full-time paid caregivers.
In Maine, according to the Department of Health and Human Services, the average cost of a nursing home is $7,667 a month ($92,004 a year). Statistics show that half of us – yes, 1 out of 2 – will spend an average of 2.5 years at a nursing home. You do the math.
Long-term care expenses are usually paid by a combination of the following private resources and government benefits:
1. The individual’s/couple’s fixed income. (e.g., Social Security and pension income);
2. Income from a retirement investment portfolio;
3. Long-term care insurance;
4. Reverse mortgage, family sale-leaseback, sale of the home (or a remainder interest in the home) or another technique that extracts cash from home equity;
5. For those eligible, a VA (Veterans Administration) benefit;
6. For those eligible, the MaineCare long-term care benefit.
It’s easy for me to see that most of us – and most of the decision-makers for us, our children – will need to consult an expert on figuring out what should be done.
Because “one size does not fit all” in long-term care planning, each possible private resources and government benefits should be considered.
The fixed income is usually the primary source of payment, either alone or in combination with another source. Because the fixed income is limited, it’s usually never enough to cover the full cost of long-term care.
Income from a retirement investment portfolio is another primary source. These funds are shielded from income tax when deposited and are subject to income tax when withdrawn. However, this tax can usually be offset by deducting part of the cost of long-term care from one’s income.
Long-term care insurance can be helpful if it qualifies for “special treatment” under the MaineCare Long-Term Care Partnership Program, which will help pay or completely pay for long term care cost. Not all long-term care insurance policies qualify for the MaineCare benefit.
Reverse mortgages, which extract cash from home equity, can be an excellent source. This allows the elder to stay at home and use home equity without making mortgage payments. The cash can be used to pay caregivers.
The Veterans Administration nursing home and Aid and Attendance benefits can help with cost of care. To qualify the veteran must have served in active duty for 90 days with at least one day during wartime. To qualify for full payment of long-term care, the vet must have suffered a 70 percent or more service-related disability. No asset or income limits apply.
To qualify for the Aid and Attendance benefit, the vet must be home bound and/or disabled and have countable assets of less than $80,000 and countable income less than the Aid and Attendance benefit. Income can be reduced by the vet’s cost of care expenses, making him/her eligible for the benefit. This benefit pays about $20,000 a year for a single vet and more than $23,000 a year for a couple. A widow of a veteran is entitled to almost $13,000 in Aid and Attendance benefits. These benefits can be used for home health care, assisted living facility, Alzheimer’s or nursing home care.
MaineCare long-term care benefit will help pay for some or all of the cost for at-home care, care in an assisted living facility, Alzheimer’s facility or nursing home. Although some restrictions apply, an elder may qualify for the benefit and preserve assets and income for the family and at-home spouse, if married.
If you have questions, contact Southern Maine Agency on Aging or another expert on elder issues. In the case of benefits for veterans, contact the VA. I am not an expert and am learning as I go along.
The author of the article from which much of this information is taken, attorney John E. Nale, serves as volunteer president of the Maine Association of Area Agencies on Aging, a statewide organization that serves Maine’s senior citizens.
Kay Soldier welcomes reader ideas for column topics of interest to seniors. She can be reached by email at kso48@aol.com, or write to 114 Tandberg Trail, Windham, ME 04062.
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