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"How to get Medi-Cal coverage for your nursing home care... without selling your home or leaving your family without a dime... Surprising ways to pay for your assisted living and long term care costs."

Elder Law Today Newsletter | May, 2015


Alternative Ways to Pay For Your Assisted Living or Long Term Care Costs

As we get older, it is important for each of us to plan for our long term care. In this issue, we will discuss several ways that your elder law attorney will help you to determine how to pay for your long term care.

MEDI-CAL: We still have Medi-Cal in California which pays for the cost of a skilled nursing facility. However, you must be in medical need of skilled nursing, and you must satisfy the income and asset requirements for qualification. Also, it is not easy to find a skilled nursing facility that will allow you to move in and immediately apply for Medi-Cal. The usual scenario is that you will be discharged from a hospital and sent to a skilled nursing facility, at which point you will apply for Medi-Cal. You must still satisfy the income and asset requirements for qualification.

VA: Many people are not aware that the VA Aid & Attendance Pension Benefit is available for wartime veterans and their surviving spouses. This benefit can help pay for in-home care, assisted living facilities and board and care homes, but you must meet the asset and income requirements, and you must be in need of help with various activities of daily living.

LIFE INSURANCE: If you have a life insurance policy, it may have value. Whole life insurance policies may have accumulated cash, which you can take out and use for your care. Some life insurance policies may also be sold to a life care funding company for a percentage of the amount the beneficiary of the policy would receive when you die. If you qualify, the life care funding company will purchase the policy and place the purchase money into a special trust, which you will utilize for your care.

NEW KIND OF LIFE INSURANCE: Many people have term life insurance policies which expire, for instance in 20 years. Your premium is lost for this type of policy if you live past the 20 years. There is a new kind of life insurance you can consider, which has an accelerated benefit rider for long term care. For this type of policy, you make your premium payments as usual, but if you are in need of care, the accelerated benefit rider can be utilized to pay for the care.

PENSION PROTECTION ACT: The Pension Protection Act (the “Act”) was signed into law in 2006. The Act allows annuity contracts without long-term care riders to be exchanged for contracts with such a rider in a tax-free transfer under Section 1035 of the Internal Revenue Code. This provision may prove beneficial to individuals who own annuities with a large cost basis and those who may not be in the best of health. The cash value of the annuity can also be used to purchase long-term care insurance.

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