Long-term care is an increasing concern in the U.S. It doesn’t take much to figure out that we are witnessing the graying of America. Baby boomers are coming of age and becoming eligible for Medicare and possibly needing long-term care. The disturbing, although not unexpected news, given the cost of health care these days, is that with long-term care, a lifetime of savings may be wiped out quickly. This is not good news, and clearly shows the need for planning in advance, to take care of this risk through long-term care insurance or Medicaid planning.
A recent study, “Effects of Nursing Home Stays on Household Portfolios ” (EBRI Issue Brief, no. 372, June 2012) made the following findings:
- Admissions to nursing homes for those 65 and older have risen from 6% in 2000 to 8.5% in 2010.
- Nursing home stays negatively affect a household’s assets.
- Long-term care insurance purchases have increased over the last ten years, but coverage is low.
- For those who spent six months or longer in a nursing home, roughly 50% were covered by Medicaid.
- Once a senior had been admitted to a nursing home, household assets/wealth declined steadily.
- On average, household wealth drops to zero within six years after someone is admitted to a nursing home.
It is never too early for clients to start long-term care planning. It may be the smartest move they ever make. With an Elder Law practice, you can help clients protect some of their household wealth from the greatest asset protection risk they will likely ever face: the nursing home.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555