Aging Louisiana residents often wonder what will happen if they fall ill late in life and need long term care. So many hear horror stories about friends, neighbors and relatives who lose their entire life savings paying between $5,000 and $10,000 per month on nursing homes, assisted living facilities, and in home care options. Many learn too late that Medicare does not pay for long term care services. This begs the question, do any options exist for individuals who prefer preserving their wealth for the next generation? Can any programs offset the immense burden long term care expenses place on families in Louisiana?
The answer is a resounding YES. Two primary methods allow Louisiana residents the benefit of having long term care costs covered by sources other than their own nest egg. The first option is long term care insurance. Long term care insurance is a wonderful tool if you can afford it, and the insurance can be used pay for a variety of services once you become infirm. However, Long Term Care Insurance gets pretty expensive. Typically, individuals pay at least $25,000 over the life of a long term care policy with no guarantee that they will ever need to use it. The second option is Medicaid. Medicaid offers programs which can cover the bulk of your long term care costs, however you need to have a low enough asset level on paper to qualify for Medicaid. If your assets exceed Medicaid’s limits, then you will not qualify for Medicaid. Instead, you will be stuck covering the full burden of your long-term care expenses until you spend your resources down below the preset limits.
Each year Medicaid releases the maximum amount of assets individuals can own and still qualify for Medicaid long term care coverage. These asset limits exclude the value of your home, one vehicle, and any money set aside for burial or burial insurance. If you are single, the resource limit has always been and will continue to be $2,000. For married couples where both spouses are in need of Medicaid for long-term care, the asset limit remains at $3,000. But what about married couples where only one spouse is in need of long term care? While the spouse in need of the care (also know as the institutionalized spouse) only gets to keep the $2,000 referenced above, the spouse not needing long term care (also know as the community spouse) gets to keep a more significant amount. The new Community Spouse Resource Limit for 2023 is $148,620. This is up from $137,400 last year. If your resources already fall below these limits, then it is unlikely that you need any long-term care estate planning.
However, when your assets exceed these Medicaid asset limits, steps can be taken to protect those assets in excess of the limits. Planning can ensure that you will qualify for Medicaid to cover long term care without needing to deplete your assets. To learn more about Medicaid asset protection strategies reach out to Legacy Law Center at (504) 274-1980 in Metairie, New Orleans, and surrounding areas or call (985) 246-3020 in Mandeville, Covington, Slidell, and surrounding areas.
Chris Kane
Louisiana Estate Planning Attorney