Medicaid planning is something that most people should include as part of their overall estate plan long before they reach retirement age. If you have never before relied on Medicaid to cover your healthcare costs you may be wondering why you would need to do so in the future and, consequently, why you need to include Medicaid planning in your estate plan. The answer can be found in the likelihood that you will need long-term care at some point during your retirement years. The odds of needing long-term care (LTC) increase with each passing year. The cost of that care is where the need to qualify for Medicaid can be found. Once you have a better understanding of the Illinois Medicaid eligibility guidelines for seniors the need for Medicaid planning will also become clear.
Will You Need Long-Term Care?
As much as we all prefer not to think about it, the reality is that we all stand a very good chance of needing LTC at some point in our lives. When you enter your “Golden Years” (age 65) you stand about a 50 percent chance of one day needing LTC. If you are fortunate enough to make it to age 85, your odds increase to about a 75 percent chance of spending time in a LTC facility before you die. Given the likelihood of one day needing LTC it is in your best interest to plan accordingly.
Can You Afford Long-Term Care?
Long-term care is expensive – and the cost is expected to continue to rise for the foreseeable future. Along with the fact that LTC involves costly around the clock care by professional caregivers, there is also a shortage of LTC facilities in the United States as a result of the dramatic increase in the number of older Americans who need LTC in recent years. As the “Baby Boomers” enter their retirement years, the number of older Americans is expected to continue to grow for the next couple of decades which will continue to cause LTC expenses to increase. As of 2016, the cost of a year in LTC in Illinois is about $75,000 with the average stay running about 2.5 years. All in all, that puts the average cost of LTC at over $200,000.
Illinois Medicaid Eligibility – Income and Assets
The good news is that Medicaid does cover LTC expenses for those who qualify. The bad news is that qualifying for Medicaid as a senior can be tricky which is why your estate plan should include Medicaid planning long before you need long term care. Because Medicaid is considered a “needs based” program, there are income and assets limits that apply to all applicants. The income limit fluctuates each year because it is tied to the Federal Poverty Level. The asset limit is $2,000 for an individual applicant and $3,000 for a married couple. If, however, you are going into a nursing home and your spouse plans to remain in your home, the “spousal impoverishment rules” apply. In that case, your “community spouse” may be able to keep more of your assets as well as a portion of your income. If your assets exceed the Illinois Medicaid eligibility guidelines, a “waiting period” will be imposed during which time you will not qualify for benefits. Instead, you will be expected to rely on those assets to cover your LTC costs. In essence, this means your entire nest egg could be depleted in a short period of time if you failed to plan ahead. The best way to ensure that you will qualify for Medicaid as a senior if you need to without putting your assets at risk is to consult with an experienced Illinois estate planning attorney now about including Medicaid planning in your comprehensive estate plan.
For more information, please join us for one of our upcoming FREE seminars. If you have questions or concerns regarding Medicaid planning, contact the experienced Illinois estate planning attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.