For many elderly individuals, the possibility of requiring a skilled nursing facility either for long-term care or following a health crisis is a very real concern. Skilled nursing tends to be very expensive; when it is required for long-term care, it can be financially devastating. Medicaid (Medi-Cal in California) provides some of the funding necessary to pay for the enhanced services and facilities provided in skilled nursing settings for many of the nation’s seniors.
Properly planning for Medi-Cal eligibility can ensure that your spouse and family will not be faced with large bills associated with your illness after your death. Additionally, trust planning, such as a QMap trust, can provide flexibility for your family with certain assets, especially your primary residence. A QMap trust can ensure that the tax benefits of home ownership are retained while also making Medi-Cal accessible to you.
However, over the course of the last several years, the Medicare and Medicaid programs have undergone significant changes. The Patient Protection and Affordable Care Act (Obamacare) attempts to significantly lower the costs of these programs, in part by changing the rates care providers are paid. Many individuals who require skilled nursing currently receive Medicaid funding to cover their care. In order to cover shortfalls in funding, states use “provider assessments” in order to generate much needed revenue.
States must decide by the end of this week whether to implement Obamacare in order to receive increased funding for their Medicaid expansions and state-run health insurance exchanges. Many states waited until they heard the results of the election before making their final determination. However, many states remain concerned that the “sequestration” automatic cuts that are part of the fiscal cliff will go into effect January 1, 2013. These cuts may affect Medicaid funding overall or the ability of states to control their own provider assessments in order to cover spending gaps in their Medicaid programs.
Skilled nursing facilities could see the bulk of the suffering if large-scale cuts are proposed and provider assessments are limited. Many skilled nursing facilities require these additional funds in order to cover the cost of 24 hour, high level care provided to the elderly and ill. Additionally, these cuts could result in substantial additional funding being required at the state level. For many cash-strapped states, the end result could be reduced access to skilled nursing care.
Planning for Medi-Cal eligibility is still an important step for providing your care in the event that skilled nursing is needed. However, you should speak to your attorney about other options available to pay for this care in the event it is needed. Long-term care insurance may be an option to cover the costs of extended illness. Additionally, life insurance policies may help cover taxes, funeral expenses, and outstanding medical expenses after your death. Preparing for the possibility of long-term illness and death in advance will help prevent family squabbles regarding how to pay for the bills you leave behind and preserve as much of the estate for your heirs as possible.
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