I am aware of a few common misconceptions or myths that people have regarding elder law. I can hopefully clarify them for you here.
THE FIRST MYTH
The first myth that we’ve been told is that when we turn 65, we will be eligible for Social Security and Medicare benefits. Medicare is supposed to be the health care provider in retirement, so that we will have health care when we age. However, Medicare doesn’t pay for custodial long term care in a nursing home, and this is probably the single biggest medical expense that seniors will have.
Statistics indicate that one in three seniors is going to die with dementia, and will need long term care in a nursing home. That doesn’t factor in those who have strokes, Parkinson’s disease, mobility issues and other health issues. This points to most of us needing to go to a nursing home, which means we should all have a plan for that. The average cost of the skilled nursing facility in Pennsylvania is almost $15,000 a month, and a significant percentage of the population can’t afford that. Even those who can afford it, need to think carefully about spending $180,000 a year in a nursing home.
None of us can think in terms of everything working out ‘fine’ if we have Medicare. If you get dementia, ignoring the fact is not going to change the fact you may get dementia. You need to understand how that will impact you and your family. There will also be a financial impact. You can make decisions ahead of time about where you want to receive your care, and how you will pay for it. Putting some effort into planning ahead takes out the element of mystery. If you don’t plan ahead, it could result in you losing everything.
Why Shouldn’t We Help?
There is this notion that we should not help families who can afford to pay for a nursing home, to save money. I would like to share my views on why I disagree and share a story with you. My grandfather was an Alzheimer’s patient and ended up in a nursing home, paying a lot of money for his care. I was relating this story at a continuing education event, speaking to other lawyers and I said that had I been doing this practice of law and knew about asset protection, I could have saved my family lots of money. A lawyer at this event asked if somebody had half a million dollars and went to a nursing home, could I help the family to save money? When I confirmed this to be true, he questioned if we should be doing this. He felt we have an obligation to pay our own way.
My view is that we don’t have an obligation to pay, and my reason is that I have paid into the system. I pay my Medicare, my Social Security and I pay all my taxes, and I do this because I know there are people who need help. There are people with disabilities and those who can’t work for whatever reason, needing help, and who are on the system. If later in life, I get sick and need help, I don’t want to be judged for this. If I need care in nursing home that costs $200,000 per year, having been a lifelong taxpayer, I will ask for help.
You Need a Lawyer to Help You!
The other notion regarding Medicaid eligibility for a nursing home, is that Medicaid has got this thick rulebook. It outlines what you’re allowed to do to become eligible for Medicaid. One of the rules amongst others, is that you have to go broke. Many people think you don’t need a lawyer to figure out how to pay for nursing home care, assuming the process is simple. However, you really do need a lawyer, because it is a complicated process. As an attorney, we need to understand the rulebook. If the rules tell us what to do to help our client save money or his house, and to ensure that his wife is well provided for, I need to do this for my client.
I responded to this lawyer who asked the question, that if we have a ‘tool’ at our disposal to help our clients save money, as lawyers we are obligated to do use the tool. We need to explain the options to our client, and allow them to make a decision. Not doing this in the legal profession, is considered malpractice. By the same token, if your lawyer said that all you need is a simple will, from my standpoint, this is malpractice.
THE SECOND MYTH
The second myth is that Medicaid is health insurance for poor people. Some people think that a nursing home that takes Medicaid, means you have to share a room with eight other people while sharing a blanket and towel, and fighting over a peanut butter and jelly sandwich every day. That is not true! Almost every nursing home in Pennsylvania is on the Medicaid roster, meaning that they take Medicaid. Some nursing homes want you to pay privately for your care until you run out of money.
However, there are other nursing homes that make a referral to a law firm like ours. They want to provide this person needing a nursing home, with care, but they don’t want their patient to lose her life savings or home. When the nursing home makes a referral, we can help the family to get the care they need and get the nursing home paid for without going broke in the process. If you’re ever in a situation when you have to choose a nursing home for your family, please ask them if they work with any local elder law attorneys, and if they can make a referral. If they are not willing to oblige, you may not be in the right nursing home! We can tell you about some really good nursing homes that are favorable in accepting Medicaid, so please reach out to us to find out more.
THE THIRD MYTH
Another myth is that people don’t have five years’ worth of history, in terms of a look back period for Medicaid eligibility, which is five years. When a person goes into a nursing home they apply for Medicaid benefits to help pay for the nursing home. On the Medicaid application, there is a question asking if you have given any money away in the last 60 months or five years. They are trying to find out if you have given the money away, just to become eligible for Medicaid. If that’s the case, it could impact your Medicaid eligibility. I hear stories about people transferring their home to their kids or moving money between accounts, to gain eligibility. However, when they need to go to the nursing home the following year, it can create problems from an eligibility standpoint. People are of the assumption that if their dad needs care, and they don’t have five years, they should not apply for Medicaid benefits. People also think that if dad is already in the nursing home and they are paying $13,000 a month, it is too late to apply for Medicaid. Neither is true.
There are really two types of cases that we see, and the first is called pre planning. In this case, we often suggest to families to use trusts. We recommend that they put their assets like their home and some money into a trust. Five years later, it’s not available for Medicaid benefits, should you need to go to the nursing home.
Another type of case is called crisis planning. This is when dad is already in the nursing home and you’re paying $13,000 a month. There are things we can do to help, by putting a strategy together based on your family’s current situation. We take into account dad’s medical conditions and the way dad owns the assets. Once we have this information, we can then take measures to ensure the assets are protected.
WE CAN HELP YOU!
On one end of the scale, we’ve got the five year plan. On the other end of the scale, we have a nursing home crisis plan. Regardless of which end you are on, there are some solutions to consider. If you’re in the middle, we can still help you. Maybe you have a parent with health issues and need the nursing home in the near future. Our lawyers will do an assessment on the medical and the financial situation. We will work on various strategies based on a parent needing a nursing home, so you know what to expect. We will also work on a strategy based on your parent not needing to go to a nursing home. From the information we provide you, you can make an informed decision about what you need.
Many people decide to do a simple will, and ignore the reality of the situation. Doing this might cost your family 10’s or even 1000’s of dollars, so forget a simple will. This is one of those areas of life where we have to engage; having those tough conversations and making some difficult decisions. The financial legacy that your loved one has worked hard for, is on the chopping block. This is the opportunity to take charge of the situation and save the assets. Even if you think you don’t have any options, I encourage you to still reach out to us. We might be able to make some legal moves that that will help you to save assets.
You can find out more information on sechlerlawfirm.com or give us a call 724 841 1393. Our offices in Cranberry and we help people in every county around Western Pennsylvania. I’ve got a team of awesome professionals and we help people with elder law issues. If you want to learn more, come to one of our Elder Law workshops. Visit sechlerlawfirm.com/workshops to register for a workshop today.