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The end of the year is always busy – but don’t put off planning for your long-term care!  Upcoming changes to New York’s Medicaid program make it more compelling than ever to take action now, if you see long-term care needs on the horizon.  Year-end tax planning can sometimes save you money – but long-term care planning can protect your life’s savings.

Here’s why we make such a dramatic statement, and why it’s important for you to act now.

  1. The U.S. Department of Health states that 70% of today’s seniors will need long-term care at some point in their lives. That’s a huge number – 7 out of 10 people!
  1. The cost of long-term care can be ruinous. You could be faced with paying $50,000 to $100,000 per year for care in your home.  Nursing home care can cost $200,000 per year.
  1. Maybe you’re thinking that Medicare will cover these costs? Sorry, Medicare does not cover long-term care, nor does any medical or health insurance.  Medicare pays for rehabilitation, up to 100 days, but it does not pay for ongoing care at home or in a nursing home.
  1. For many seniors, long-term care insurance is too expensive, and often unavailable due to their age or pre-existing conditions. If you’re thinking about it, make sure that the daily or monthly benefit makes sense for you.  And you will probably want an inflation rider, which adds a lot to the premium.  If there were a substantial gap between the insurance benefit and the actual cost of your care, how would you pay for it?  If the insurance won’t protect your savings, it may not make sense for you.
  1. Acting quickly could save you many thousands of dollars. Although New York’s Medicaid program is far more generous that most other states, recent changes in our laws make it more difficult than previously to protect your assets and obtain benefits from the program.   Chief among the new restrictions is a 30-month (2 ½ year) “look back” for gifts and transfers made on or after October 1, 2020, that will be required for Community Medicaid applications.  (Community Medicaid includes home care and assisted living care.)  Gifts and transfers made within the “look back” result in a period of ineligibility for Medicaid, during which period you’ll have to pay for care with your own funds.  The new “look back” will be phased in, and will apply to Community Medicaid applications filed on or after April 1, 2021.   That’s why we continue to urge people who live in New York to begin planning as soon as possible.

Creating and executing a plan takes time, and the new regulations will be here soon.  The sooner you begin, the more likely you will be able to take effective action to protect your assets and income, and put yourself in a position to obtain the care and benefits that you need.

Contact us now to schedule a consultation!  You’ll be glad you did.

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