Elder law is another aspect of estate planning, focusing primarily on the needs of families and individuals as they age. Issues of aging include senior housing and home care, long-term (or nursing home) care, guardianships and health care documents, and Medicare, Nevada Medicaid and pre-Medicaid planning.
As our population ages, more and more of us confront elder law-related issues, whether for ourselves or our parents. One of the most pressing issues is long-term nursing home care, which usually is not covered by traditional health insurance. Depending on where you live and the level of care needed, nursing home care can cost from $35,000 to $150,000 a year. The average stay is slightly more than three years. Most people end up paying for nursing home care until their personal (or family) assets are depleted, then they may qualify for Medicaid to pick up the cost.
Careful planning, however, can help protect your assets, whether for your spouse or for your children. The belt-and-suspenders approach is to purchase long-term care insurance while you are healthy enough to qualify, and to make sure you receive the benefits to which you are entitled under Medicare and Medicaid. Veterans (and their single surviving spouses) also may seek benefits from the Veterans Administration.
Clients are frequently confused over the differences between Medicare and Medicaid. Though their names are very similar, the programs are quite different. Medicare is an entitlement program, a federal health insurance program in which most people enroll when they turn 65 years old. There are no financial qualification rules. Medicare has two primary parts: Part A and Part B.
Medicare Part A covers in-hospital care, extended care after a hospital stay, some home health care services, and hospice services. The rules for nursing home coverage are very strict and, in fact, Medicare pays for less than 9 percent of nursing home care in this country.
Medicaid, is a joint federal-state program, Subject to certain federal requirements, each state implements its own regulations on how the program is managed. Medicaid is not an entitlement program like Medicare, but rather a form of welfare. Medicaid eligibility is determined after the proper application is submitted to the state. There are many Medicaid insurance programs available in Nevada, from basic medical coverage to nursing home programs. An overview of all Nevada Medicaid programs is available online.
If you or your loved one is not in immediate need for long-term care assistance, you may be able to distribute or protect assets now so that when the long-term care assistance is needed, the qualification process can go quickly. It is impossible to give general guidelines for Medicaid planning because every client's case is different. Remember, you cannot simply "give away" assets to impoverish yourself and thereby qualify for Medicaid. There are stringent rules and penalties prohibiting this, which is why most traditional "revocable" trust planning will not help with pre-Medicaid planning.
An "irrevocable" trust, however, is a trust that cannot be changed after it is created. Income-producing assets may be placed in an income-only irrevocable trust, and the income may be paid to you for life. Properly funded and managed, after five years, principal will be an unavailable asset for Medicaid purposes and will be preserved for your family. This is one strategy to protect certain assets while still providing the income from those assets. (However, if you require nursing home care, the trust income will be available to pay for your care.)