Why long-term healthcare insurance is a smart financial move--at any age

Nobody expects to end up needing long-term care. But an accident or unexpected illness can sometimes result in catastrophic changes that leave you unable to take care of the basics: feeding, bathing and grooming yourself. In some circumstances, you may find that you are completely incapacitated. You need help--around the clock.

That's expensive, and many people don't have the means to cover those kinds of expenses. Many don't know that Medicaid is available to most people who are need long-term care. Costs are then borne by state and federal funds, and family does not have to foot the bill. But are there hidden costs to the program? Is it really a "no-cost" option?

The answer is no

Many people believe that Medicaid is a medical insurance program for very low-income individuals. That belief is correct. But there are some circumstances where Medicaid covers individuals who are above the poverty threshold. One of those is long-term care. If you are catastrophically injured, you may be able to receive care without cost during your lifetime.

But if you receive funds for long-term care, the state of Georgia may put a lien against your estate for each and every dollar they spend.

Are you sure?

In 2006, most states implemented recovery acts that allowed them to recoup the cost of the care you received from Medicaid. If at any time during your life, you need long-term care, regardless of your age, the state can, and most likely will, request the funds be repaid. You are not, however, required to pay the state back before your death. And the state cannot ask you to repay the costs during your lifetime.

How does this affect me?

Put simply, if your costs are quite high, you may have no money or property to leave to your heirs. Medicaid will not require you to sell your home during your lifetime, but any equity in your home may be liquidated for your Medicaid lien. Similarly, bank accounts and other property may be turned over to the state after your death to offset the lien.

How can I avoid this?

The simplest way is to purchase long-term care insurance. Long-term care insurance will cover your costs and may still allow your estate to remain intact.  For more information on how you can avoid a lien against you estate, or to get more information on long-term care insurance, contact an elder law attorney who has experience in this area.

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