One key to effectively planning for long-term care is to coordinate the available benefits from government programs with other estate planning tools. Unfortunately, though, coordinating in this way can be complicated, and many people wait too late to begin planning for their long-term care.
Consider that since 2009 long-term care insurance premiums have increased by 80 percent in Texas. On top of that, it is estimated that a mere 10 percent of people older than 50 even have insurance for their long-term care, and one-third of that 10 percent have their policies through their employers. In other words, many elders and their families will need creative solutions in order to protect estate assets and keep important benefits such as Medicaid and veterans' assistance.
Often, when senior citizens don't have long-term care insurance, families look to Medicare to cover the cost of in-home care. But to receive Medicare coverage, a person has to be recovering from a hospital stay or some other injury or illness that requires a doctor's supervision. Custodial care, such as helping a person bathe and dress, is generally not covered under Medicare. This can come as a shock to families who haven't looked into their full range of options.
What often happens is that family members end up providing in-home care, and this can become overwhelming, given other pressures in life, such as careers and raising children. Families sometimes spend their elderly loved ones' savings to cover custodial care, and once those funds are exhausted, the family resorts to Medicaid.
It is possible, however, to protect estate assets and continue receiving benefits such as Medicaid, Supplemental Security Income or veterans' aid. An estate planning attorney can help Texas families coordinate these programs with tools designed to protect assets.
In many cases, the key is to start planning now.
Source: The Dallas Morning News, "No solution yet in sight for long-term care costs," Jim Landers, Sept. 23, 2013