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WELCOME TO OUR LONG TERM CARE ASSET PROTECTION CLASS

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WELCOME TO OUR LONG TERM CARE ASSET PROTECTION CLASS. Presented by ESTATE PLANNING & ELDER LAW SERVICES, P.C. WHY SHOULD I CARE ABOUT LONG TERM CARE?. Persons aged 65 to 69 years face a 1 in 2 risk of entering a nursing home. 1 1 House Select Committee on Aging.

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WELCOME TO OUR LONG TERM CARE ASSET PROTECTION CLASS

Presented by

ESTATE PLANNING & ELDER LAW SERVICES, P.C.

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WHY SHOULD I CARE ABOUT LONG TERM CARE?

Persons aged 65 to 69 years face a 1 in 2 risk of entering a nursing home.1

1House Select Committee on Aging

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WHY SHOULD I CARE ABOUT THE COSTS OF LONG TERM CARE?

    • The average monthly cost of “attendant” nursing care in Michigan for 2008 is $6,191.00.1Skilled nursing care can be three times as much.
  • 1MI Department of Human Services

WHAT DOES LONG TERM CARE COST?

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If discharged from a hospital, Medicare only covers “skilled” nursing care costs for up to 100 days, so long as skilled care is required

  • 20 days are covered at 100%, but you are required to pay a co-payment for the next 80 days unless your Medigap policy pays for the deductible
  • Benefit renewable via the “60 day/3 day”rule
  • Medical Insurance does not pay for Nursing Home care

AREN’T NURSING HOME COSTS PAID BY MEDICARE OR MEDICAL INSURANCE?

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Pros

  • Covers assisted living and in-home care, not just nursing home care
  • Provides most flexibility
  • Prevents loss of assets with least complications
  • Cons
  • Eligibility requirements
  • Cost prohibitive
  • Loss of investment/ premiums if not used
  • Strength of insurance company
  • If you can afford it - get it!

EVALUATING LONG TERM CARE INSURANCE

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In most cases, by planning ahead, you can shield a substantial percentage of your assets from the cost of long term care.

  • Planning ahead requires the creation of a flexible estate plan including, at a minimum, “Medicaid friendly” Financial and Medical Powers of Attorney. Sometimes action is required now versus later.

WITHOUT LTC INSURANCE CAN I PROTECT MY ASSETS FROM LTC COSTS?

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Medicaid is a Federal Program established by the Social Security Act.

  • Medicaid exists to ensure the availability of essential healthcare services, including Nursing Home Care, for people meeting certain income and asset requirements.

WHAT IS MEDICAID?

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The rules for Medicaid eligibility differ somewhat depending upon whether the applicant is single or married.

  • However, for both married and single applicants, to become Medicaid eligible three tests must be met:
  • Needs/“Seven Doors” Test
  • “Countable” Income Test
  • “Countable” Asset Test

MEDICAID ELIGIBILITY RULES

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CAUTION!

ELIGIBILITY RULES JUST CHANGED!

  • On 2/8/06 President Bush signed into law the Deficit Reduction Act of 2005. Michigan’s DHS implemented these and other substantial changes throughout 2007.
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If an applicant meets the income eligibility rules for Medicaid, asset eligibility can often be achieved by:

    • Strategic gifting
    • Transforming countable assets into exempt assets
    • Transforming countable assets into unavailable assets
    • Utilizing Medicaid Type A or B Trusts & SBO Trusts
    • Maximizing the Community Spouse’s PSA

BECOMING MEDICAID ASSET ELIGIBLE

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