Statistics show that someone turning 65 today has almost a 70% chance of needing some kind of long-term care services at some point in their life. A full 20% will need care services for 5 years or longer. (1) And, with the rapid pace of advancement in life-prolonging medical technology, today’s younger workers may even face a greater chance of needing care in their lifetimes.
Clearly, long-term care is an important topic that affects nearly everyone. No matter your current situation, it is important to take into consideration since there is a good chance that either you or a loved one will need it eventually.
The High Cost Of Long-Term Care
Unfortunately, long-term care is very expensive. In 2017, Genworth did a comprehensive survey throughout the United States, pulling data from over 15,000 survey responses to learn what people pay for care throughout the country. (2)
In California, the average price for a private room in a nursing home is $9,703 a month. That is $116,435 per year on average. It is even more expensive in higher cost-of-living areas, costing $171,185 a year in San Francisco.
As mentioned above, 20% of today’s 65-year-olds will need 5 years or more of long-term care. Five years in a nursing home in San Francisco costs about $855,925 and prices are expected to rise at a rate of 3% a year. With numbers like those, you can see how easy it would be to spend your entire life savings, with nothing left to leave to your loved ones.
California’s Solution: Medi-Cal For Long-Term Care
Because so few people can actually afford the long-term care that they need, the California government created the Medi-Cal for Long-Term Care program. If you meet the eligibility requirements, they will cover the cost of your long-term care for you. However, the eligibility requirements are not simple.
There are specific allowable asset limits and income limits for a spouse that is not receiving care. Certain assets, such as a primary residence, do not count against the limit while others do. Those who exceed the limits must pay a share of the cost of the services they receive.
How you meet the requirements also makes a big difference in eligibility. You cannot just retitle or gift away all of your assets one day and be eligible for Medi-Cal the next. There are rules that must be properly followed and other considerations that cannot be overlooked.
Introducing Mid-Cal Benefits
As retirement planning specialists, we have seen so many people who are unprepared and struggle to meet their long-term care needs that we wanted to help. We created an entire company dedicated to helping seniors access medical benefits, Medi-Cal Benefits. At Medi-Cal Benefits, our goal is to help seniors going into skilled care to qualify for Medi-Cal. This includes gifting money properly and protecting assets for future generations.
If your long-term care needs are not imminent, we offer pre-planning, where we can develop an estate plan that protects you, your family, and your assets in a way that will not make you ineligible for benefits. If your long-term care needs are immediate, we offer crisis planning. Even if you have previously been denied benefits, we may be able to help you obtain relief while protecting your assets. Finally, we offer recovery planning to prepare your family in the case that the state attempts to recover assets after you have passed away.
Whether you’re proactively thinking of your own long-term care needs, or have a parent that you’re concerned about, we are here to help. For more information, call Leslie at 909-985-4466 or firstname.lastname@example.org. With our help, you can still leave a legacy, no matter your long-term care needs.
Philip A. Board MSFS, CFS, is a retirement planning specialist and the founder of 1on1financial, an independent comprehensive investment firm serving individuals and businesses throughout the United States. Through educational workshops and a non-sales environment, 1on1financial specializes in working with employees of Southern California Edison, UPS, and Frontier.