Here's our situation:
We bought $100/day policy about 20 years ago at age 54, after DW had a stroke, and when full year nursing home costs were about 35K. No inflation clause. Today, in our retirement community (65 houses, 65 apartments, 45 assisted living quarters, 65 nursing home units) the cost for full nursing care is about 77K. Our (now separate) policies total about $2400/yr and haven't gone up in 10 years. The original policy has changed hands 5 times, and is now held by a Trust (SHIP) in Pennsylvania.
As it stands, the policy would cover about 1/2 the annual costs for 3 years. The rest would come from our savings.
Now... to address the Medicaid situation. Yes, it is true that there is a spend down from assets before Medicaid would pick up the nursing home costs.
BUT... while the state will take all but (in our case) about $50,000... the non-nursing home spouse may keep a car and the family home.
With the demise of the nursing home resident, the survivor may keep the home and its value.
That means a delicate balance between existing assets and the value of the home. In our case, the balance works, as we do not have substantial assets enough to pay the full LTC costs for 4 or 5 years. The house value would still exist.
As has been discussed on many threads, owning the home has an extended benefit. Worthwhile to explore this issue with your state Laws on minimum assets and the "lookback" period. In fact, the decision to buy our current home was made for this purpose. We are now past the 5 year lookback period.
This article is a good explanation of the process:
http://coulsonelderlaw.com/understanding-medicaid-lookback-transfer-penalty-rules/
Worthwhile depending on your net worth. Making the decision to use the home retention rule is definitely subject to the five year lookback rule, so timing is important.
We bought $100/day policy about 20 years ago at age 54, after DW had a stroke, and when full year nursing home costs were about 35K. No inflation clause. Today, in our retirement community (65 houses, 65 apartments, 45 assisted living quarters, 65 nursing home units) the cost for full nursing care is about 77K. Our (now separate) policies total about $2400/yr and haven't gone up in 10 years. The original policy has changed hands 5 times, and is now held by a Trust (SHIP) in Pennsylvania.
As it stands, the policy would cover about 1/2 the annual costs for 3 years. The rest would come from our savings.
Now... to address the Medicaid situation. Yes, it is true that there is a spend down from assets before Medicaid would pick up the nursing home costs.
BUT... while the state will take all but (in our case) about $50,000... the non-nursing home spouse may keep a car and the family home.
With the demise of the nursing home resident, the survivor may keep the home and its value.
That means a delicate balance between existing assets and the value of the home. In our case, the balance works, as we do not have substantial assets enough to pay the full LTC costs for 4 or 5 years. The house value would still exist.
As has been discussed on many threads, owning the home has an extended benefit. Worthwhile to explore this issue with your state Laws on minimum assets and the "lookback" period. In fact, the decision to buy our current home was made for this purpose. We are now past the 5 year lookback period.
This article is a good explanation of the process:
http://coulsonelderlaw.com/understanding-medicaid-lookback-transfer-penalty-rules/
Worthwhile depending on your net worth. Making the decision to use the home retention rule is definitely subject to the five year lookback rule, so timing is important.
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