Knowing the cost of long-term care helps individuals plan for this expense. Just as it is important to plan for retirement, it is equally as important to plan for one’s potential need for long term care. Annually, Genworth Financial conducts a Cost of Care Survey, the 2017 survey was conducted by Carescout®. It may not come as a surprise that the cost of nursing home care in the United States increased in 2017. Genworth’s survey reports that the national median cost of a semi-private room in a nursing home is $85,775.00, up 4.44% from 2016 and the cost of a private room increased over 5% to $97,455.00 annually.
What is the cost of long-term care in Pennsylvania?
What may come as a surprise is the cost of long-term care in Pennsylvania compared to the national median. In Pennsylvania, the 2017 median cost for Nursing Home Care, Semi-Private Room was $111,325.00 per year and for a private room the median cost was $120,085.00. For the Greater Philadelphia Area, the median annual cost for a Semi-Private Room was $116,070 and Private Room was $131,400.00. For the full survey and more information please visit: https://www.genworth.com/about-us/industry-expertise/cost-of-care.html. The 2017 survey was based on responses from more than 15,000 nursing homes, assisted living facilities, adult day health facilities and home care providers.
What are the options for paying for nursing home care in Pennsylvania?
As the survey indicates, the cost of nursing home care is growing ever more expensive. In the event that you would need to enter a skilled nursing facility, the options to pay for this level of care, are (1) paying privately, which could deplete your assets; (2) obtaining long term care insurance that will pay all or part of your care expenses for a period of time; or (3) qualifying for Medicaid, which has strict financial requirements.
What is the look-back period?
Medicaid has a five-year look-back period, whereby when you enter a nursing home and apply for benefits, the Department of Human Services will look back five years to see whether you have made any transfers or gifts in excess of $500.00 per month. If you have, this will create a period of ineligibility.
What can I do now to plan for the cost of long-term care?
There are many options that are available to plan for the cost of long-term care. The key is to plan early as Medicaid has a five-year look-back period. Options that you should discuss with an elder law attorney include, but are not limited to:
- Long-term care insurance;
- Irrevocable Medicaid Asset Protection Trust;
- Purchase of Medicaid exempt assets;
- Life estate deed in the home of another;
- Paying off debt;
- Exempt transfers to a caregiver child or a child with a disability; and
- Irrevocable burial accounts.
Public benefits laws, particularly Medicaid, are in a constant state of flux therefore it is important to consult with an elder law attorney to discuss the above options to determine what long-term care plan may be best for your individual situation. Please consult the Elder Law Department of OWM Law to discuss the above options.
— Written by Rebecca A. Hobbs, Esq., CELA*
*Certified as an Elder Law Attorney by the National Elder Law Foundation as authorized by the Pennsylvania Supreme Court.