Planning for Nursing Home Bills

Long-term stays in a nursing home can deplete your lifetime savings and affect the inheritance you can leave for your children and loved ones.  Proper long term care planning helps in paying for nursing home expenses.  Depending upon how long before you enter a nursing home, there are several strategies you can employ to manage nursing home bills and costs:

You can purchase insurance that pays all or a significant portion of your nursing home expenses.  The costs of this option depend upon your age when you take out the policy, whether you want the policy to pay all your nursing home costs or just a portion, and how many years of nursing home care you want the policy to pay.  For a young client age 40, wanting 5 years of 80% coverage, this policy might cost $4,000 a year; but for an 80-year-old it might cost $4,000 a month.

You can purchase an annuity that provides a steady stream of income to help offset your monthly nursing home expenses.  A $200,000 annuity might provide $1,500 a month of income you can use to partially pay your nursing home costs.

Some life insurance policies will provide payments during your life for nursing home care, and pay the unused balance to your beneficiaries.  (Ullenberg Law Offices SC do not sell insurance or annuities, but we have worked with our client's insurance salespersons to make these products part of their coordinated overall estate plans.)

For those with sufficient resources, paying out-of-pocket for your nursing home care is an option, and sometimes a very good option because it allows you to choose where, when, and how often the services  are provided.  This allows clients to stay in the privacy and comfort of their own homes as long as possible being cared by family members, with out-side assistance only as necessary. 

Government programs sometimes pay for necessary long-term nursing home care for certain people.  

Medicare pays for short-term recuperative care for those over 65.  

Veterans may receive VA Benefits to help cover part of their long-term care which can provide around $1,800 a month or more of assistance. 

Medicaid can cover the full cost of nursing home care for eligible poor individuals, subject to certain income and asset limits.  (Sometimes older individuals transfer the bulk of their assets to their heirs years before they need nursing home care in order to be closer to being eligible for Medicaid payment.  This is called Medicaid Divestment.  The government frowns upon this and is constantly making new rules and regulations to prevent or thwart it.)