It seems almost cruel in a way that nursing homes are as expensive as they are. People who have saved well for their retirements and intended to leave something to their heirs in an estate plan, often face steep nursing home bills. If a stay in a nursing home is long enough, then all their savings can be wiped out and there will be nothing left for the heirs.
Many older Americans look around for other ways to pay for long-term care in a nursing home, if they ever need it. There are many excellent life insurance and long-term care insurance products for those who plan ahead and can afford the premiums. Other people might have to rely on Medicaid for their care as CNBC discusses in "Here's a surprise source you can tap for long-term care services."
The big catch with Medicaid is that it is only available when you run out of assets. Each state may have slightly different rules, but in general to be eligible for Medicaid to pay for nursing home care the patient needs to have fewer than $2,000 in assets. To get around this problem, patients cannot just give all their assets away to family members when they need to go into a facility. Any such transfers may be treated as something that could have been sold to pay for care and could disqualify them from receiving help.
There are ways prevent a lot of these issues for people who plan ahead. An elder law attorney and financial advisor can help you develop a plan to help you pay for long term care if the need arises. For those that those that can’t afford it help with a long term care plan that will not make you ineligible for Medicaid. This planning must be done years in advance, so do not delay getting an appointment.
Reference: CNBC (Feb. 27, 2018) "Here's a surprise source you can tap for long-term care services."