Yosef Meystel suggests financial planning for nursing home care

Aug. 4, 2010 - PRLog -- Yet as the average life span lengthens and more people become frail or suffer from a chronic illness, the more likely it is that you, your spouse, a parent, or another relative will have to pay for nursing-home care sometime in the future.

Begin the planning by evaluating both the potential need for nursing-home care and financial resources. Those with few resources can qualify for Medicaid, a federal-state program that pays for health care. Those who are wealthy can go it alone. It's the middle group, who have a net worth of $500,000 to $10 million, who generally have the most need for long-term care insurance

Medicare, the federal program most people associate with health care for the elderly, offers very limited help.

To calm fears about being financially devastated by nursing-home costs, many people are buying long-term care insurance. Many policies also pay some expenses for at-home care.

One other option is a life insurance policy with an ''accelerated death benefit.'' That allows you to take the proceeds if you're diagnosed with a terminal illness or one that will require extended care. The downside is that if you spend the life insurance on nursing-home bills, it will not be available to your survivors.

Another approach is to buy into a residential ''life care'' community that offers increasing levels of care as you age. You start by living independently in your own housing unit, but you're able to move up to higher levels of care as you need them at no or little more expense.

Alternatively, if you're at least 62 and have substantial equity in your home, you can get a reverse mortgage and use the proceeds to pay for long-term care expenses or insurance premiums. (For more information, visit www.reverse.org, the site of the nonprofit National Center for Home Equity Conversion.)

For people without insurance or savings, Medicaid is the last resort. But figuring out how to qualify can be difficult because the states have wide latitude for setting their own requirements concerning the amount of assets and income a nursing-home resident and spouse may retain.

Be aware as well that once a nursing-home patient and his or her spouse have died, federal law requires states to try to reimburse Medicaid by recovering money from the estate. Thus, even if parents bequeath their home to their children, the state may try to sell it to pay the deceased's Medicaid bills. Other assets, such as a joint bank account or part interest in a business or property, may also be targeted.

The financial options listed here are no more appealing than the possibility of having to go to a nursing home. But what hurts most is if you do no planning at all and have to scramble when a crisis hits.

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About Yosef Meystel:

Yosef Meystel is the president of YAM Management, a property management company located in Skokie, Illinois. YAM management operates several nursing home facilities and properties located within Illinois.