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FIVE THINGS TO KNOW ABOUT PLANNING FOR NURSING HOMES,
LONG-TERM CARE AND MEDICAID

1. It is not estate planning. Writing a Will or Revocable Trust creates a plan for how your assets will be handled after death. These estate planning documents do not handle issues related to nursing home bills or other long-term care costs before you die. Protecting your assets to ensure that there is an inheritance to pass on after death is a very different problem. Unfortunately, different laws apply to lifetime bills like a nursing home and you need different tools and strategies to protect your assets.

2. There are three ways to pay for long-term care. You can pay for nursing home bills, assisted living or other long-term care in three different ways. Private pay means that you use your own income and assets to pay the bills. This is the option that most people fear because it can deplete your assets. A second option is to arrange for long term care insurance. If the insurance company pays all or part of the cost of care, your assets can be protected. However, you need to set up this insurance while you are healthy and independent or else the insurance company will deny your application. Long-term care insurance can also be expensive. Finally, you can have the government pay the bill. This is where the Medicaid and Family Care programs come in to the picture. Most people use some combination of these three options to cover their care. Planning for the future is all about choosing how these three sources will work together to pay your bills if you need long-term care.
   
3. There are two different government programs. In Wisconsin we have two different programs for paying long-term care bills- Medicaid and Family Care. Medicaid covers only nursing home bills. It is more rigid and structured, but it pays benefits to the nursing home immediately when you qualify. Family Care covers in-home care and assisted living care. It is also less formal and the application process is less imposing than with Medicaid. However, this program can be more confusing in a number of ways. In many counties there is a waiting list to receive benefits. Not all counties treat their waiting list in the same way. Sometimes you can get on the waiting list quickly and without much effort. In other counties you can be financially eligible while on the waiting list and there is more effort involved to get on the list.
   
4. You will need to save your documents. When applying for either Medicaid or Family Care, you must provide documents that show all financial matters for you and your spouse for the previous 5 years. This is the 5 year rule. You should save all of your documents such as bank statements, statements from financial institutions, letters from insurance companies, documents from the sale of a house or other assets, etc. If you are not in the habit of saving these papers you will need to get them replaced (at your cost).
   
5. The government does not have all of the answers. Our healthcare system and the government benefits that pay for long-term care are very complicated. The people who work for the County and for agencies like the Office of Aging and the Aging and Disability Resource Center can answer many questions and guide you through many parts of the process. However, there is a real limit to what they can and will tell you. The people who work for the government can tell you what the basic rules are and explain the various steps in the process. However, in many cases, that is very different from learning what should I do or how do I protect assets and maximize the value of the government benefits? Getting the answer to those questions requires the government rules to be matched up with your particular assets and your specific situation. Getting qualified professional advice can give you clear direction on how to manage and preserve your assets.

 

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This is not legal advice or tax advice, pursuant to disclaimer.
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