The Nursing Home – 5 Ways to Pay For It

How will you (or your parents or grandparents) pay for a nursing home? People work hard their whole lives saving money, living frugally, hoping to pass something on to their kids and grandkids. Then reality sets in as age and health issues force that money to be used for healthcare instead.

Maybe you have wondered, “What are the options for my family to pay for nursing and long term care costs?”

There are 5 basic ways to handle it.

1. Stay at home without outside help. As long as one spouse is healthy, this works fine. But too often I see the caregiver spouse start having health issues, possibly brought on by the stress of 24-hour care for their loved one.

2. Move in with family and avoid the expense altogether. Just tell them to get your room ready, you’re on your way! This option works great for some families, but not so great for others. And it’s not just the younger generation that has the concerns. Often, my older clients say they don’t want to be a burden to their kids or put stress on them. Plus, there are some health concerns that are just beyond what a family can handle at home on their own.

3. Spend your life savings, either on nursing help at home or in a facility.

4. Let the government pay for it. Too many times, I have heard people say, “I’ll give all my stuff to my kids and let the government pay for my nursing home.” Unfortunately, there are some kinks in this plan.

If you give your money away, you really have to give it AWAY. This means your kids can waste it all, the money can be exposed if your child gets divorced, or can be at risk if they have financial problems such as getting sued, having a downturn in business or getting laid off.

You can’t just give all your money away and then apply for Medicaid to get the government to pay for your nursing care. If you give assets away, it may impact your application if you apply within 5 years after the gift (5 years according to federal law – Illinois is still at 3 year “look back” because they are late in complying with the federal requirement).

Even if you get on Medicaid, you have limited options. The government won’t pay for home care and only pays for the bare minimum of care in a nursing home that may not have been your first choice. I’m sure it’s no surprise that the nicest nursing homes don’t take government aid, they only take private payments.

5. Buy long term care insurance. If you need long term care, whose money would you rather spend? The insurance company’s or yours (which was intended to be your kid’s inheritance)? Plus, certain long term care policies allow you to use the funds to hire help at home, so you can avoid a nursing home altogether. In addition, many people are exploring hybrid long term care benefits, where they purchase an annuity or life insurance policy that can be accessed for nursing costs if necessary.

We can help you sort out these options.  The earlier you start planning the better. If you would like to start planning now for nursing home costs, our popular Long-Term Care Essentials Workshop is a great place to start. This free workshop will talk about planning for care, protecting your assets and myths about Medicaid qualification. Find out more about the workshop HERE.

However, it’s never too late to plan.  Even if you have a loved one in a nursing home using their savings to pay for it, call us at (217) 726-9200. There are legal and financial strategies that may be able to protect some of the funds for the family.

For more information about general planning, check out our article “Getting Old Ain’t For Sissies: 10 Things to Consider As You Get Older” HERE.