Dear Attorney Tully: I read your article in the Bristol Press about long-term care. Thank you for all the information you provide on Medicare, Medicaid and healthcare. Most of your answers only pertain to senior couples, not singles or widows. What is the amount of assets a single person can keep? Is purchasing long-term health care insurance a good idea? I heard a person only can buy it for either $50,000 or $100,000. Is that correct? Thank you for taking the time to read my letter.
ANSWER: You can purchase far more than $50,000 - $100,000 in long-term care insurance. You can also purchase long-term care insurance that will protect your assets after the policy maximum payout has been exhausted.
While long-term care insurance can be a good way to pay for a nursing home stay or a home health care worker, it doesn’t come cheap. Annual premiums vary significantly, depending on your age, health and the type of policy, but policies can run as high as $9,000 or more per year. You do not need to pay that much, however. There are numerous ways to reduce your costs.
As a single person, a widow/widower or a divorced individual, the rules are different for asset protection or Medicaid (Title 19). Here are a few things that you should consider to protect yourself and your lifetime of savings.
1. As a single person, if you become ill and require a permanent placement in a long-term care facility (nursing home), you would have to spend all of your assets below $1,600. It is important to remember that there are many exceptions to this rule and in some cases you can protect all of your assets.
2. Be careful who you are listening to. Remember that as a single person, a widow/widower, the rules are different from the rules (spend down) for married couples. Don’t listen to those who tell you that you do not have planning options and can’t protect assets even in a health crisis. Even if someone is well intentioned, they may be giving you bad advice that could hurt you.
3. Have all of your planning documents in place and up to date. The best way to protect yourself and your assets is to make sure you have a plan and the appropriate documents to carry out the plan. An example of the documents that you should have in place include: Last Will & Testament, Power of Attorney, Health Care Representative and a Living Will and, in some cases, a trust. The laws change often and it is crucial that your estate planning documents reflect the law changes.
4. Be proactive and plan in advance so you can use planning options for your health and wealth. As a single person, it is extremely important to plan early and know your options. Remember Medicaid (Title 19) spend down laws are harsh on single individuals. An important time to plan is after the loss of a spouse and when you are in good health.
Even if your health fails there are still many planning options to protect yourself. As always, consult with a qualified elder law attorney first.
Attorney Daniel O. Tully is a partner in the law firm of Kilbourne & Tully, P.C., members of the National Academy of Elder Law Attorneys Inc., with offices at 120 Laurel St., Bristol (860) 583-1341.