An article in the New York Times (“As Lives Lengthen, Costs Mount” by John Leland, Friday, November 13th) highlighted the serious problems that face New York City seniors, who are living longer than ever before. Seniors are dealing with health issues that used to be fatal, but that today can be managed for decades. Unfortunately, increasing life spans mean that the total cost for their health care and aging-related support services is also higher, particularly in the New York City Metropolitan Area. These costs will surely continue to rise as ever-more-sophisticated medicines, procedures, and medical equipment are developed to assist the elderly.
A financial crisis frequently arises because many people have only enough income and savings to cover their everyday expenses. Once they develop a long-term health care need – even something as simple as an aide for several hours a week, physical therapy or expensive medicine – it can be disastrous to their financial position. Medicare may not cover the expense, and many people don’t have enough extra money to cover their additional health care costs. Even if you have some extra savings, the cost of long-term care – which is not covered at all by Medicare – can be astronomical.
If you do not take action, these extra, unanticipated costs can quickly wipe out your entire life’s savings. You could even be forced out of your home, if you no longer have enough money to pay the mortgage or upkeep of the house. In the New York Times article, Daniel Reingold, a nursing home corporation chief executive, states, “relatively healthy people [are driven] into nursing homes, where Medicaid picks up the tab for eligible seniors. . . . You have people in our facility, you say, why are they here? They seem to be in good shape . . . [but] they outlived their money. They’re coming to a nursing home because they can’t afford their housing or there is no available housing.” This is a real and frightening possibility.
New Yorkers over 85 “represent one of the fastest-growing age groups in New York,” states the article. “Many never planned to live this long, or to navigate a financial landscape as confounding as the one they are in now.” One woman mentioned in the article was so worried about outliving her savings that she materially curtailed her lifestyle.
Caution, prudence, and “not taking advantage of the system” are important and commendable. But the article highlights the fact that despite people’s best efforts, obtaining long-term care and assistance, and paying for it, constitute a daunting challenge. When your money needs to last longer, but your long-term care costs keep going up, you have a recipe for financial disaster. Your top priority should be to protect the money you have, so it can be used to support you as long as possible, while at the same time putting yourself in a position to obtain high quality health care and assistance. Taking action can be essential to maintaining a comfortable lifestyle, avoiding impoverishment, and sometimes, avoiding unnecessary confinement in a nursing home.
Elder Law strategies are designed to solve the problems of paying for your long-term care and support services, while enabling you to maintain your lifestyle, over an extended period of time. By placing assets in a “Medicaid Asset Protection Trust,” for example, your assets can be made available to supplement the care that Medicaid provides. There are also strategies to protect your income, so you can continue to pay your rent, utility bills, and other everyday expenses, without having to pay far more to your health care providers than you can afford.
A key aspect of Community Medicaid in New York is that there is no five year “look back.” Thus, if you need assistance in your home or in an assisted living facility, and protect your assets appropriately, you can become eligible for Medicaid very quickly. The “look back” provision in New York applies only to Medicaid Nursing Home applications.
A lot of people think “Medicaid is for poor people. I’m not poor.” But if you live for ten or twenty years after you develop a need for long-term care, as you well could, there is every likelihood you will end up poor long before you pass on. If you take appropriate steps now to protect your financial well-being, you will have a much greater chance of being able to stay in your home as long as possible while receiving health care and assistance. You will give yourself the best chance you can to maintain your lifestyle and remain a part of your community. If you need to enter a nursing home at some point, advance planning can result in all your assets being protected, and even last-minute planning can usually protect a significant portion of your assets.
Seniors are wise to be concerned about the costs of living a long life. Elder Law strategies were developed to protect this vulnerable population against impoverishment and against possibly being forced out of their homes and into a nursing home. Learning what you can do to protect yourself can be crucial to your long term well-being.
Elder Law is Lamson & Cutner’s only area of practice. We feel strongly that educating people about how to protect themselves is a key part of our mission. To learn more, we recommend that you visit ourhomepage . You are also welcome to call us for more information, or to set up a consultation.