I have always loved the famous quote of Yankee great Yogi Berra, “If you don’t know where you are going, you’ll end up someplace else.” As an attorney who focuses every day on the need to plan ahead, it reminds me of the need to be intentional in setting plans for how you want your life to play out. Without a plan for getting where you want to go, how do you expect to get there?
In my practice, one area that requires the most advance planning involves long-term care. Many people don’t realize that long-term care expenses, like the costs of home caregivers, assisted living fees, and nursing home costs, are not covered by Medicare or by private health insurance. These costs can devastate a family’s life savings if they are incurred in an emergency situation without planning.
Yogi Berra was no stranger to long-term care. Michael Kay, a longtime play-by-play announcer for the New York Yankees, tells a story about Berra and his close friend and teammate, Phil Rizzuto, that is rarely heard but extremely touching. Berra and Rizzuto played together for the Yankees for eleven years, during which they won the World Series six times. Both won MVP awards while playing for the Yankees, and both are in the Hall of Fame.
Kay says that when Rizzuto became ill toward the end of his life, he moved to an assisted living facility. Berra lived half an hour away from the facility, but every day he would drive to the facility to sit with Rizzuto. They would play cards until Rizzuto fell asleep, and only then would Berra leave.
I’m certain that Rizzuto had no difficulty paying the fees charged by the assisted living facility, but other families aren’t so lucky. The average cost of assisted living facilities in Arkansas is around $3,500 per month; the average cost of memory care in an Arkansas assisted living facility is closer to $5,000. Most nursing homes cost even more than that. Not many retired individuals have the income to cover costs of that nature, so they are forced to liquidate life savings, sell real estate, look to family members, or take other drastic measures to make up the difference.
With some planning, there are other ways to cover the costs of long-term care. Obviously, a family could private pay those costs using their income and assets if they have sufficient resources available. But there are three other options that many people don’t know much about.
First, long-term care insurance policies are available that would cover the costs of an assisted living facility or a nursing home when the need arises. Some policies could be described as “use it or lose it” plans, much like auto insurance. But newer plans come with a death benefit payable to the beneficiary of your choice if you do not need long-term care coverage during your lifetime, making the premiums less painful.
Second, Medicaid can cover the cost of long-term care for those who qualify. However, you should be aware that, while almost all nursing homes accept Medicaid, many assisted living facilities do not. That means relying on Medicaid can limit your options when choosing a long-term care facility. On top of that, the financial requirements are very restrictive. If you have sought Medicaid coverage for a family member and been told they don’t qualify, you owe it to yourself to take a second look with an elder law attorney who really knows the ins and outs of Medicaid. But if you have time to plan ahead for Medicaid coverage instead, your likelihood of success will dramatically increase.
Third, a little-known Veteran’s benefit called Aid and Attendance can provide some help to veterans and widows of veterans in need of long-term care. As with Medicaid, there are strict financial requirements for qualification, and planning ahead is always the better way to go. But when working with an experienced elder law attorney, more options may be available than you probably thought.
Statistics indicate that 70% of people over the age of 65 will need long-term care at some point in their lives. At those odds, planning ahead to cover the cost of that care is a wise decision. And if you or a family member is already in need of long-term care, don’t give up. Do your homework. Speak with someone who knows every option available. It’s worth it.