Why You Should Consider Long-Term Care or Medicaid Planning Now

Long-term care costs on Long Island are ruinous for a middle-class family. Nursing home costs are north of $150,000 a year and 24/7 home care could cost you over $118,000 year. We are seeing increasing challenges with respect to obtaining Medicaid for our clients.  Medicaid applications are subject to heightened scrutiny. New York State has instituted Medicaid managed care but managed care companies are withdrawing from the market due to low reimbursement rates.  On the Federal level, there are proposals to block grant Medicaid or to impose per capita caps on states. This would be a change from the way Medicaid is administered presently whereby the states receive monies based upon their actual spending.

With a block grant, a state would get a certain sum of money based upon what they are spending now. This amount would be pegged to a cost-of-living increase but since medical costs outpace other costs of living, over time, the block grant would not cover the state’s cost of providing medical care.

With per capita caps, a state will receive a certain amount of money based upon everyone within a certain category (blind, aged, and disabled children and adults). Like block grants, it is expected that the cost of living increases for each category will not keep pace with the increased medical costs that states will incur.

If block grants or per capita caps are imposed on states, they will have incentive to tighten the Medicaid rules more than ever. Thus, we believe that people should start planning sooner rather than later to meet their long-term care needs. Even if you are in your 40s, it is not too early to start this planning. Planning would include consideration of long-term care insurance and estate planning that includes the use of well drafted trusts and powers of attorney.

If you fail to plan, you are planning to fail.  – Benjamin Franklin.