How to pay for nursing home care in Phoenix?
How to pay for nursing home care in Phoenix? How much does nursing home care cost? Read our article to see how our Elder Law Attorneys can help.
Medicaid and Long-term care planning, or nursing home care planning, is becoming increasingly important. As medical sciences advance, people are living longer and are more prone to the necessity of long-term care. Our clients usually ask how to pay for nursing home care in Phoenix when they come to see our estate planning attorneys.
In Arizona alone, the population over the age of 65 is 16.90 percent. That percentage is expected to double in the next 10 years. Arizona’s population in 2021 was 7,276,316 people. If we estimate the population in 2032 to be 7,500,000, and we assume that 30 percent of those are over the age of 65, then a conservative estimate of the number of Arizona residents over the age of 65 in 2032 would be 2,250,000 people. Of those, 8 percent will need a nursing home or long-term care. 8 percent of 2,250,000 is 180,000. So that is 180,000 people that will need long-term care or nursing home care in Arizona alone.
The scary part of these figures is that the Arizona Health Care Cost Containment System (AHCCCS) – Arizona’s Medicaid Administrative Agency – only has approximately 16,456 beds available in total. This agency offers health care services to persons who have limited income, are pregnant, and/or have disabilities. Basically, if you qualify for Medicaid both medically and financially, AHCCCS will pick up the tab for your long-term care or nursing home care. Qualifying is notoriously difficult, as they have only limited resources and fraud has run rampant in the past. With the few number of beds that are available, it is important that individuals do their own planning and don’t wait and rely on Medicaid services through AHCCCS. While AHCCCS may be an option, they will likely be qualifying only those that have their ducks in a row, and those that are the best candidates.
There are three main options for how to pay for nursing home care in Phoenix.
- Private Pay
- Long-term care insurance / VA benefits
Private Pay – What does nursing home care cost?
Private pay is exactly that; you pay for the nursing home care, until you run out of money and then you can apply for Medicaid. The average cost of a nursing home in Arizona as of 2022 is $6,844.00. As you can imagine, costs can add up quickly and an entire lifetime’s worth of savings can disappear to the cost of healthcare. These long-term care costs are only going up every year. However, being able to pay your medical bills during retirement is one of the reasons why we work so hard during our working years. Prudent planners will have savings and retirement accounts that can be utilized to pay for these costs. But with people living longer, the average stay at a nursing facility has grown to 3.7 years for women, and 2.2 years for the average man as of 2021. We have had clients with loved ones that have lived in a nursing home care facility for 10 years or more. If you multiply the average cost of $6,844.00 by 12, you get the yearly cost of $82,128.00. If you multiply that by 10, the total cost of the nursing care facility alone would be $821,280.00 over a ten-year span. As the cost of care rises every year, you could easily pay a million dollars or more for care.
Through Private Pay, you will cover this cost. But imagine a married couple in which only one spouse is ill. The married couple could be forced to spend down assets extensively, leaving the healthy spouse with less to live on during retirement. Saving money and planning for this need is a great idea for most, and with some pre-planning, we can save significant amounts of money. Even with crisis planning (planning done when the individual needs to go to a nursing facility right away), we can often save clients 50 or 60 percent of their assets. If you have a nest egg and a family history of needing long-term care or nursing home care, then please contact us to schedule a free case evaluation to see what we can do to save you money when the time comes.
Long-term care insurance / VA benefits
Long-term care insurance or VA benefits are often used in conjunction with private pay and/or Medicaid. If you think you may have benefits from the VA, then you should contact that agency and get something in writing from them that shows your benefits. Medicaid law requires that you exhaust all VA benefits and insurance benefits before they will qualify you. The VA can be terribly slow at finding your documents and seeing what benefits you qualify for, especially if you are qualifying through your spouse’s service. It is better to do this research now and be ready to go should you need care.
Long-term care insurance is becoming increasingly expensive and increasingly hard to get. As the number of people that will need care goes up, insurance companies are less willing to spend the money on these types of policies. Further, the older you get, the harder it will be to obtain one of these policies. With that said, if you can qualify for a policy or if you already have one, these can be a fantastic way to supplement your Private Pay structure. You will want to ensure that a copy of the policy is kept with your important documents such as your estate plan and powers of attorney. Make sure that the agent you have designated in the Powers of Attorney knows about the policy. Make sure that you continue to pay the policy and keep it in good standing, as if it is cancelled, it can be impossible to obtain a new one.
Medicaid is a lifeline for those who cannot afford private pay or those that do not have access to insurance or VA benefits. To qualify in Arizona, you must have medical need as defined by the law, and you have to qualify financially. This means that you cannot have more than $2,000.00 in assets, and you can’t make more than $2,523.00 a month in income. You can still qualify if you own a home, and you can still qualify to an extent if you make more than $2,523.00, but anything above this amount will be paid to the state of Arizona. Every Medicaid case is unique, and your qualification is going be heavily fact dependent. You cannot have given any gifts for the previous five years. If you have, then there is a penalty period, and you may not qualify immediately. Worse yet, if you don’t qualify, and you don’t have assets or family to cover the bill, you may not receive care. Placing yourself in the best possible position, as one of the best potential candidates for Medicaid is the best way for you to ensure you will receive the care you need if the number of beds runs short.
Realistically, many people that need long-term care or nursing home care in Phoenix and in Arizona in general will need to use a mixture of all of the above. One of the best strategies for saving money is to combine private pay with Medicaid using a gifting and annuity strategy. If other benefits are also available, we would look to those first to ensure that we save as much money as possible. We can also do Irrevocable Asset Protection Trusts or use a gifting strategy in advance of when we will need the nursing home. There are many options available to those that will need them.
In closing, the cost of care is on the rise, and the number of people that will need long-term care is also on the rise. We are heading towards a scenario where there may not be enough beds to care for everyone that needs care. Unfortunately, that means that we cannot necessarily rely on anyone else to make sure that we get the care we need, if and when we need it. Now is the time to maneuver yourself into the best possible position to ensure that you are a qualified candidate and that you will receive care. Our attorneys are skilled at Medicaid planning and can usually provide assistance even if you think you have otherwise planned well. The options are various, and every case is different. We recommend that you reach out and schedule a free consultation with one of our attorneys to go over your specific circumstances.
Call Citadel Law Firm today at (480)565-8020 or click here to schedule a free consultation. Our Estate Planning Lawyers and Elder Law Attorneys will be pleased to help you. We can help you plan for the future and make sure you have the best chances of qualifying for government benefits.