Any family who has gone through the process of helping a loved one into a New York nursing home understands the initial “sticker shock.” New York remains one of the most expensive states in the country for long-term care.
As outlined in the latest Genworth Cost of Care study (from 2013), the median cost of a private room in a long-term care facility in the state is $125,732 per year. Not only that, but the rate is expected to jump by five percent over the next few years. Notably, the average cost nationwide is only $83,950. This means that our state is near the very top of the list when it comes to caregiving costs for seniors.
Do not forget, however, that these studies only report on averages or the median rate. In certain locations, the costs can even run higher. For example, last week Newsday published a story which found that within New York, Nassau and Suffolk counties average the highest in the state. In those counties, the average stay costs over $145,000 per year.
Paying out of Pocket
These costs are already quite high, and for those planning for the future, they will only rise. At the end of the day, the yearly burden is likely much more than most New York families can handle on their own. Fortunately, the New York Medicaid system exists specifically to help in these situations. Once qualified, Medicaid will cover nursing homes stays and may provide at-home aid as well to avoid the nursing home altogether.
However, even families with seniors that eventually qualify for Medicaid may still need to be aware of the costs for care, because they may be required to pay out of pocket for at least a portion of the stay.
That is because qualification for Medicaid is based entirely on financial need. Applicants must “spend down” their assets before qualifying. This ‘spend down” can take the form of selling assets to pay for care or giving assets to family members and triggering a “lookback” penalty. An elder law estate planning attorney can advise on which option makes the most sense to save assets in your case.
The “lookback” period is five years. In other words, all assets given to others within five years will trigger a penalty wherein Medicaid benefits are not provided for a set length of time. The penalty timing usually hinges on the cost of nursing home care in the area. For example, if $125,000 in assets were transferred in the lookback period (perhaps a home transferred to an adult child), and the average yearly cost of care in that location is $125,000, then Medicaid will not cover care for one year. In this way, there is a close connection between average care costs and Medicaid strategies as part of your elder law estate planning.