Using a Hybrid Approach to Long Term Care

November 8, 2019

In many areas in and around Baltimore, nursing-homecare ranges between $9,000 and $13,000 per month. This can drain a life savingsvery quickly causing many seniors to attempt to “age in place” as long aspossible, meaning they attempt to stay in their home with health care aides.

Long-term care insurance (LTCI) and the Medicaid AssetProtection Trust (MAPT) are ways to address these soaring long-term care costs.Often viewed as either/or options, using a hybrid approach may be a better alternative.

Long-term care insurance protects both income and assets fromthe costs of long-term care. It is a form of self-insuring and is typicallypurchased when one is younger and healthier in anticipation of getting olderand needing long-term care. When needed, the insurance will pay for healthaides in the home.

Depending on the benefits of the policy, long term careinsurance may also pay for assisted living and nursing-home costs. The downsideis that long term care insurance is expensive and requires passing certainhealth assessments to qualify.

Another option for planning for long term care needs is aMedicaid Asset Protection Trust (MAPT) that protects assets from going tonursing-home costs after the assets are in the trust for five years.  Once the time limit passes, you may then applyfor Medicaid to pay for nursing-home costs.

However, unlike long term care insurance, the trust does notprotect your income. Medicaid income rules determine how much income you keep.

Now for the hybrid approach:  buy some long-term care insurance and also create a Medicaid Asset Protection Trust. Factors that help make the decision regarding the hybrid approach include the daily benefit of the LTCI, the maximum lifetime payout, if there is an inflation rider, and other assets and income that could supplement the insurance. For more information on this strategy and how to best apply it to your situation, contact the experienced Elder Law attorneys with Stouffer Legal at 443-470-3599.

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