If You Want to Be Truly Prepared for the Eventualities that You May Face During the Latter Portion of Your Life, You Should Understand Some Facts About Alzheimer's Disease, Dementia, and Long-Term Care Costs
MEDICAID PLANNING IN THE QUAD CITIES AND EARLY SIGNS OF DEMENTIA
DENNIS D. DUFFY Iowa Estate Planning Attorney
If you want to be truly prepared for the eventualities that you may face during the latter portion of your life, you should understand some facts about Alzheimer's disease, dementia, and long-term care costs. In this paper we will provide some clarity so that you can go forward in an informed manner.
UBIQUITY OF ALZHEIMER'S DISEASE The widespread nature of Alzheimer's disease is quite alarming. The Alzheimer's Association website is a good source of information about this disease. According to the site, one out of every eight senior citizens has contracted Alzheimer's disease. That equates to about 13 percent. You may think that 13 percent is not a particularly high percentage, but you have to drill down deeper to see the real picture. It becomes more and more likely that you will contract Alzheimer's disease as you get older. A senior citizen is someone who is at least 65 years of age, so the 13 percent figure includes people of this age. Approximately 45 percent of people who have reached the age of 85 are suffering from Alzheimer's disease. During the last census the United States Census Bureau used the data that was
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compiled to provide some comparative statistics with regard to age groups. They found that the segment of the population that is between 85 and 94 grew faster than any other ten-year set between the years 2000 and 2010. Alzheimer's disease causes dementia. If you are suffering from an advanced form of dementia, you are probably going to require nursing home care.
LONG-TERM CARE COSTS The costs associated with long-term care are exorbitant these days, and they have been rising steadily year-by-year. Our firm practices law in the state of Iowa. According to a study that was done by Genworth Financial, in 2013 the median annual charge for a private room in a nursing home in our state was $67,525. If you have to spend multiple years in a nursing home, you could be looking at a very large figure. Before you shrug off the statistics with the understanding that you will be qualified for Medicare as a senior citizen, you should understand the fact that Medicare will not pay for long-term care. The program will pay for up to 100 days of convalescent care after surgery, but it will not cover custodial care.
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MEDICAID PLANNING Medicaid is a government health insurance program that is jointly administered by the federal government along with each respective state. Medicaid will pay for long-term custodial care. However, Medicaid is a needbased program. It is only available to people who have very limited financial resources. The upper countable asset limit in most states for an individual is just $2,000. If you are a responsible person who was in a position to plan ahead for retirement, you will probably have assets in your possession that exceed this amount when you are a senior citizen. Yet, the majority of people in nursing homes are enrolled in the Medicaid program. How can this be? People anticipate the need for Medicaid coverage in the future, so they engage in a Medicaid spend down. They spend down or divest themselves of resources in advance of applying for Medicaid. Timing is important, because there is a five year look back period. Medicaid evaluators will examine your financial dealings going back five years. If they find that you have given away assets within five years of submitting your application,
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FREE REPORT
you will be deemed ineligible. Your eligibility will be delayed until you have served a penalty that is tied to the amount of your divestitures as they compare to the cost of long-term care in Iowa. Because of the look back, you should plan ahead if you want to be able to qualify for Medicaid. If you recognize early dementia symptoms you can begin a Medicaid spend down, and you may not need nursing home care for another five years. You can also be proactive about planning ahead with future Medicaid eligibility in mind even before you see any signs of dementia. Alzheimer's induced dementia is not the only reason why people require nursing home care. In fact, most seniors will eventually need help with their activities of daily living. CONCLUSION Alzheimer's disease strikes a very significant percentage of elder Americans, and those who
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suffer from Alzheimer's induced dementia often require nursing home care.
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Nursing homes are very expensive, and Medicare will not cover nursing home costs. Medicaid will pay for long-term care. Because Medicaid is a need-based program, you must be able to demonstrate financial need if you want to qualify. This can require asset divestitures. Medicaid planning in the Quad Cities can be complex. To be certain that you are proceeding in the optimal fashion, discuss your unique personal situation with a licensed Quad Cities elder law attorney.
REFERENCES LongTermCare.gov http://longtermcare.gov/ Alzheimers's Association www.alz.org
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About the Author Dennis D. Duffy Dennis Duffy combines an extensive background in business with a wide range of legal experience to provide his clients with a uniquely practical perspective. An attorney since 1989, he practices primarily in Estate Planning, Wills, Trusts and Probate. Mr. Duffy also offers frequent educational seminars on a variety of estate planning topics to both the general public and private groups in the Quad Cities area.
Experience Mr. Duffy has been practicing law since 1989, when he joined the general practice firm of Bozeman, Neighbour, Patton&Noe in Moline Illinois. In 1990, Mr. Duffy and five other attorneys founded the law firm of Anderson & Nelson, with offices in Rock Island, Illinois and Davenport Iowa; the firm eventually grew to 12 attorneys, with Mr. Duffy as managing partner. He founded Duffy Law Office in 1995. Before returning to school for his advanced law and business degrees, Mr. Duffy worked for nearly a decade for Per Mar Security & Research Corp. in Davenport, as Vice President. Mr. Duffy is a member of the American and state bar associations of both Iowa and Illinois as well as the Scott and Rock Island County Bar Associations. He is an executive member of the American Academy of Estate Planning Attorneys. He is coauthor of the book Estate Planning Basics – A Crash Course in Safeguarding Your Legacy. Also, the American Academy of Estate Planning Attorneys announced that Mr. Duffy was honored with the Academy Fellow designation. The Fellow program recognizes Academy Members who demonstrate advanced expertise and significant practical experience in the estate planning, trust, tax planning, guardianship, probate and estate administration fields.
Duffy Law Office Helping Families Preserve their Wealth www.duffylawoffice.com 1840 E. 54th Street Davenport, IA 52807
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