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Pegasus Financial Planning, LLC

Estate Planning Pt 4: Understanding long-term care options

Blog Ty McGilberry

Estate Planning Part IVIn this last part of our 4 part series, we focus on understanding how care is delivered later in life and the various options the family should consider.  Long term care impacts 70% of Americans over the age of 65. Historically, the need for long term care services were fulfilled by family and loved ones. Either due to changes in economic factors or changes to family structures, more and more Americans are looking outside of the family for care and support during the twilight of their lives. 

  • In home care and adult daycare: For many people as they age a primary goal is to remain in their family home.  There are many options for in-home care from family provided care to skilled care.  While home care may be less expensive than nursing home care; it does still come with a cost.  Understanding the cost to provide the needed services is only one part of the process.  Other items to consider are the schedule of coverage and who will provide the coverage and when.  Mental impairment can be a key consideration when caring for otherwise healthy family members especially when family caregivers have careers that take them away from home.  For these families, adult daycare can be an option for caring for parents while caregivers continue their careers. 
  • Independent living communities: Seniors that are in reasonably good health and who still value a level of independence, independent living facilities can provide a level of community, activities, and home maintenance services such as housekeeping, lawn maintenance, and other home upkeep.  The cost of these facilities varies and may also include meals and other personal services.
  • Continuing care retirement communities: Continuing care retirement communities offer many of the same opportunities as independent living facilities.  A key difference between these two communities is residents in continuing care retirement communities are guaranteed access to healthcare providers when needed.  Access to medical care may vary by level of care and costs.  It is important to understand all of the options when making these considerations.
  • Residential care facilities: While continuing care communities provide a level of independence, residential care facilities are communities for those that need a level of assistance in living.  Care in these facilities may range from bathing and eating to those that need supervision due to cognitive impairments.  Residential care facilities may or may not have skilled nurses providing care to the residences. 
  • Nursing homes (custodial care, skilled care, & hospice care): Nursing home care is what most people think of when considering long term care providers.  Mental pictures of the hospital setting with elder patients but as we highlighted above there are many types of care providers and options.  As above, there are different types of nursing home providers and understanding the difference is key to making family decisions.  A custodial care facility offers unskilled care under the supervision of a nurse or a doctor.  Conversely, skilled care facilities offer continuous care provided by nurses and/or doctors and require a physician’s order.  Hospice care takes place when it is believed that a patient has less than a year to live and has been certified as terminally ill. Hospice care is a special kind of care provided when end of life is expected and may include pain management, comfort care, and other palliative care.  
  • Medicare: Understanding what is covered and what is not covered by Medicare and Medicaid is critical to making the most informed decisions for families.  At age 65 all Americans and permanent legal residents that have been in the US for at least 5 years & have worked for 10 years and paid Medicare taxes become eligible for Medicare.  Medicare will provide for in-home care for as long as care is required; however, Medicare has limits on the number of days in which skilled nursing care is provided.  These limits combine days that are fully covered and days in which the patient is responsible to cover portions of the costs.  
  • Medicaid: Medicaid is another government program which is administered by the states.  Medicaid is designed for indigent and destitute persons.  Because of the limitations and requirements in order to receive support from Medicaid, families are required to exhaust resources prior to receiving support which otherwise may have passed to heirs.  Another key factor of Medicaid is the look back provision.  The look back provision (normally 60 months) is used by the state to recapture the value of any assets that were gifted or transferred within the last 5 years.  The value of these gifts and transfers are used to disqualify patience for a certain number of months from receiving benefits from Medicaid.  These disqualified months are known as the Medicaid penalty period.  Prior planning can help minimize or eliminate the 5 year look back penalty.

In all of these cases, planning is important to ensure that family goals are achieved.  If you would like help in moderating these discussions then we are here as a resource for you and your family.  Use this link to schedule a consultation today!

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