Blog Series Part 1: Paying for Long Term Care in Pennsylvania

Part 1 – Three Options for Paying for Nursing Home Care

The average annual cost of care in nursing home in Pennsylvania is currently a little over $100,000/year. It is no wonder that a common fear among older adults is that they will end up in a nursing home and leave their spouse in the community destitute or pass away without any inheritance to leave for their children. Knowledge is power in any situation, so the first thing one needs to understand in this situation are the basic options available to pay for nursing home care.

First, to dispel a misconception, Medicare Part A (not to be confused with Medicaid) does NOT pay for long term custodial care in a nursing facility. Medicare will partially cover the cost of up to 100 days of skilled nursing care and rehabilitation, if the recipient meets certain strict eligibility criteria. But note, Medicare never pays exclusively for what is called “custodial care,” like help with bathing, dressing, or caring for oneself.

So what are the basic options for paying for long term care in a nursing home? One option is Long Term Care Insurance, if you are fortunate enough to have a policy in place. However, many individuals did not have the foresight or could not afford to purchase a policy when they were younger and premiums were more reasonable, thus few people can rely on this payment option. Another option for covering the cost of long term care is the most obvious one – using a combination of income and a gradual liquidation of your assets to the cover the cost of care. While this is certainly a straightforward approach, at a cost of approximately $100,000 a year, most people will quickly deplete whatever assets they own. If the nursing home resident is married with a spouse living in the community, this option is particularly devastating due to the rules dictating what assets may be retained by the community spouse versus which must be used to pay for the institutionalized spouse’s care.

Last is the Medicaid program, also known as Medical Assistance in Pennsylvania. Medicaid is the fundamental financial safety net for most individuals facing long term care in a nursing home. While the availability of Medicaid is a godsend for many needing care, it also has very complex set of financial qualification rules and the potential pitfalls are numerous, especially for those with a community spouse or those who were lucky enough to have certain assets prior to entering the nursing home. Many try to take steps to try to protect those assets without consulting with an elder law attorney knowledgeable about Medicaid Planning, which if done incorrectly could result in a denial of benefits and stiff financial penalties.

Subsequent parts of this Blog Series will focus primarily on how the Medicaid application works, how to submit a successful application, and the potential planning options available to protect and preserve your assets for loved ones so it’s not all lost to the nursing home. If you would like more information in the meantime, contact Yardley Estate Planning, LLC where you can come in for an elder care consultation, explore your options and develop a prudent plan for paying for care.

This blog post was originally created by Joellen Meckley while she served in an “Of Counsel” position in our firm. While she no longer does that, we do maintain a  professional relationship and if you have any Elder Law needs, I’d recommend you reach out to her firm Meckley Law. If you need Estate Planning, please reach out to us.

Mike Garry

Author Mike Garry

Michael Garry is a CERTIFIED FINANCIAL PLANNER™ practitioner and a NAPFA-registered Financial Advisor. He is a member of the National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association (FPA).

More posts by Mike Garry