Planning for Long-Term Assisted Living and Nursing Care

Seven out of 10 people in the U.S. will require long-term care in their lifetime. This includes help with activities and tasks that a person can no longer perform on their own, such as eating, bathing, dressing and attending to personal health. Whether your eventual need for long-term care results from aging, illness or an accident, you can be sure it will be expensive. That is why it makes sense to engage in planning to finance these costs well ahead of time.

The sheer cost of care is the primary concern for most families, and for good reason. Recent insurance industry data shows the median monthly cost of care in New Jersey is as follows:

• $1,950 for adult day care, which is for people who need assistance or supervision only during the day
• $5,529 for homemaker services, which involves an aide coming to the home to clean, cook meals and run errands
• $5,720 for a home health aide, who comes to the home to provide extensive personal care
• $5,750 for a room at an assisted living facility
• $12,471 for a semi-private room at a nursing home
• $13,231 for a private room at a nursing home

Few families have the resources to sustain these costs for very long. What’s more, regular health insurance and Medicare don’t usually cover long-term care. As a result, Medicaid is the most common source of LTC funding in New Jersey.

Medicaid has strict eligibility rules. You must be a New Jersey resident aged 65 or older or blind or disabled. As of 2022, your monthly income must be below $2,523. Income includes wages, Social Security, pensions, SSI payments, IRA distributions and any other income. Any income over that limit must be transferred to a qualified income trust (QIT) in order to preserve your Medicaid eligibility.

Planning ahead is critical because the state Medicaid program closely scrutinizes asset transfers made in the five years before you apply. Transfers to trusts, gifts of assets to others and sales of assets at below market value within the five-year period can cause you to lose Medicaid eligibility for months or years, depending on the value of the asset. So it is important to set up your QIT and transfer property to it more than five years before you need Medicaid.

New Jersey has multiple Medicaid programs designed for people of different ages and health conditions. You should speak with an experienced elder law attorney who can help you understand, qualify for and apply to the right program.

The Paton law Firm LLC in Fairlawn, NJ helps residents of Passaic and Bergen counties plan for long-term care. You can schedule a free initial consultation with an attorney by calling 201-470-4801 or contact us online.