Even if you have carefully saved for long-term care, the actual cost of live-in home health aides, nursing homes and assisted living facilities is considerable, averaging at $10,000.00 per month. While many people disdain Medicaid facilities, what they may not know is that most skilled nursing facilities do accept Medicaid because most people do not have the large amount of assets they would need to provide for their long term care, indefinitely. Medicaid is our safety net after we have spent our assets down to $2,000.00. Medicaid Planning is a type of asset protection where an attorney analyzes the person or the couple’s assets and applies the analysis to the law to protect their rights to transfer assets following the law. The U.S. Congress and the Illinois Legislature wrote laws to protect spouses and dependents from impoverishment in a situation where one spouse must go into long term care. Married couples have a great deal of strategies available to protect their assets from counting against them and an Elder Law attorney can help counsel to save assets using these anti-impoverishment protections to protect marital assets.
When facing helping an elder enter a skilled nursing facility, it is vital to also seek help from a Health Care Advocate in order to avoid the skilled nursing facility attempting to strip all assets from a married couple of single person. The Health Care Advocate has done the diligence or investigation into the quality of service and safety at a facility, as well as assessing the culture of the Administration Department of that facility that is planning to take all the assets it can before “allowing” the resident to file a Medicaid application. This behavior is in defiance of federal law and it is quite common, so it is important to be informed and to do asset protection with an attorney before going to the facility, if possible. Even if you do not, you still have rights to assert and I would not let the facility intimidate you with contract breach allegations.
Reviewing the skilled nursing facility contract is also very important for avoiding court at a later time for alleged contract violations. The facility may argue that you have waived your rights by signing their contract that has illegal provisions in it. This can be defeated with arguments that the facility forced you to sign it under duress and that illegal provisions should never be in a contract period, but you are still paying court fees to work this out. For that reason, having a legal review performed before signing the contract and after the elder is admitted to the facility that accepts Medicaid, is one way of crossing out the offending provisions to render it safe to sign. This is a service I perform that also lets the facility to the fact that you are represented by legal counsel.
When you have done the Medicaid Planning, you can approach the Admissions Department with an offer, such as: “My mother needs to pay a skilled nursing facility $200,000.00 in private pay, that we want to pay you with a Medicaid Compliant Annuity.” The Administration will know that you have saved $200,000.00 in the process of coming up with that annuity, but they will be happy to take it and admit the elder, “allowing” her to file a Medicaid application upon admission. In this way, you have done your homework and you are coming to them from a much stronger bargaining position. If the Administrator balks, trying to take all $400,000.00, you can tell him/her that you will need to keep looking for a facility and chances are he/she will relent and accept your offer.
Another tactic the nursing home may employ is to have the intake social worker assure you that they will file the Medicaid application for free, once your parent has spent their assets down to $2,000.00. They will usually add that they are doing wonderful things for the community with the money and that their mission is most noble, etc. Any offer like that should be reduced to a writing, lest the elder later face an involuntary discharge for failure to pay, once they have been shaken down to the $2,000.00 level.
Another consideration is the quality of life for that elder, particularly if they have to endure a great deal of pain and daily humiliation that makes their lives more of a delaying of their death. It is personal, but it would be helpful to the POA Agent to know at what point to consider stopping treatment, if that is desired.
Long term care costs have risen to the point where the spouse not living in the facility, trying to cover the entire nursing home bill, risks complete destitution. Adult children may need to spend their own savings to care for their elder parents living in a facility. Healthcare costs are the greatest contributor to people needing to file bankruptcy. Medicaid is the present safety net for elders who cannot afford such steep long-term facility costs. In order to safeguard your assets for heirs and plan for costs that Medicaid will not cover it is important to consider a range of options, including a well drafted Irrevocable Trust. There are also a number of options for housing and levels of care to consider. In filing the Medicaid application, it is advisable to retain an attorney to help prepare it. Nursing facilities have a conflict of interest in filling out applications because they receive more money when the families pay privately than when Medicaid pays. There are Medicaid recipient’s rights that must be safeguarded throughout the application process and after the elder is admitted to a facility. These rights must be protected before signing the application, lest the family be possibly tied up in unnecessary litigation or the quality of life of the elder be diminished, needlessly.