The US Department of Health and Human Services estimates that over half of people over 65 will need help with daily activities like bathing, dressing, or eating at some point. However, relatively few older Americans have private long-term care coverage. Many families plan to rely on savings, unpaid caregiving arrangements, or Medicaid for nursing home care. But these options can be inadequate.
Eldercare experts recommend a deliberate and systematic approach called a Medicaid “spend down” strategy. This involves putting yourself or a relative into poverty so that Medicaid picks up the costs of a nursing home or assisted living services sooner than later. To qualify, families must use a family member’s assets on appropriate costs, such as prepaying for a funeral or buying a burial plot.
Reducing income and savings to qualify for Medicaid can seem daunting. However, without planning, the high cost of long-term care can quickly drain savings. The average cost of semiprivate room in a nursing home is $111,000 per year, compared to median retirement savings of $200,000.
Medicaid eligibility is generally limited to people with low incomes and minimal assets. Experts recommend working with eldercare specialists to ensure assets are used appropriately and avoid inadvertently disqualifying the person needing assistance from accessing Medicaid.
Source: https://apnews.com/article/medicaid-spend-down-nursing-home-care-costs-2295b93a42ecd32ea16fa9042e4c28c6