Recently I prepared a Community Medicaid application with home-care services for a 90 year old widow. Unfortunately she had run out of her life savings and was convinced that either she applies for Medicaid or be moved to a nursing home.
The above description relates to many of our elderly population. Most are under the impression that their money will outlive them and therefore there is no need to protect anything, because they have plenty.
In this article I would like to touch upon two big issues: The first is how does one know they have plenty of resources to see them through to the end. The second is what benefits does one loose or gain when they protect some or all of their life savings and still apply for Medicaid medical assistance.
How does one know they have enough assets to keep them at home? Consider the following: Today, private home care services cost approximately $25.00 per hour. Multiply that by 12 hours per day and the cost becomes $300 per day. Lets multiply that by 30 days and we now are looking at $9,000 per month. Multiply that by 12 months and we are looking at $108,000 per year. The average person saved approximately $500,000 during their life time, that means that in less than 5 years that individual becomes penny less. At that point the individual has no choice but to apply for Medicaid; however, lets review what that individual gave up.
Applicants who protect their life savings have the upper hand regarding their needs. While Medicaid provides health insurance, home care services, depends, nurses, and coordinators, it does not cover for personal things, such as, credit card payments, new furniture, home appliances, and other personal expenses. Had the applicant protected their life savings all of the above will be in their reach.
Amazingly, throughout the applicant’s life time they were always conservative and thinking about that rainy-day so they saved their money. However, now that they are in need of assistance they are under the impression that this is the rainy-day and start tapping into their life savings. The above concept works for some of the people, but the majority find themselves penny less after using all of their life savings and are still in need of care.
One should always explore all of the options offered to them, before they make a decision to spend their life savings.