More than half of Americans over 65 will eventually need help with daily activities like bathing, dressing, or eating — yet only about 3–4% of people over 50 have long-term care insurance. Medicare generally doesn’t cover extended nursing home or assisted living care, leaving many families to rely on savings, unpaid caregiving, or Medicaid.

The problem is that qualifying for Medicaid’s long-term care coverage requires very low income and minimal assets — typically under $2,800–$3,000/month in income and no more than $2,000 in countable assets. With nursing home care averaging roughly $111,000 per year and the median retirement savings for 65–74-year-olds sitting at about $200,000, an unplanned long-term stay can drain a family’s resources within a couple of years.

Eldercare experts recommend a strategy known as a Medicaid “spend down” — systematically and transparently using a person’s assets on appropriate expenses (like prepaying for a funeral, paying down a mortgage, or covering nursing home costs out of pocket) to reach Medicaid eligibility sooner. However, experts strongly caution against doing this without professional guidance. Transferring assets to relatives to appear poor on paper can backfire, as Medicaid applications include a five-year “look back” review of finances.

More than 30 states offer “medically needy” programs that allow people with high healthcare costs to qualify even if their income initially exceeds Medicaid limits. For those years away from needing care, purchasing a long-term care policy in your late 40s or early 50s is recommended — a couple hundred dollars a month now could cover tens of thousands in future care costs.

Link to original article: https://apnews.com/article/medicaid-spend-down-long-term-care-nursing-home
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