How to Pay for Long-Term Care in Michigan
As the cost of long-term care in Michigan continues to rise, many individuals and families worry about how to afford it, especially if they will need in-home services or nursing home care for decades. Fortunately, careful planning can provide options for paying for long-term care required for disabilities or advanced age.
Out-of-Pocket Payments
Some people pay for long-term care out of pocket, using their personal savings, retirement funds, or family wealth to afford home health services or nursing home care. Although using personal funds to pay for long-term care represents the simplest option, the high cost of long-term care, which some people may require for decades, can quickly deplete family assets. Paying out of pocket for long-term care works best for individuals with significant financial resources.
Long-Term Care Insurance
Individuals may purchase long-term care insurance when they plan for the need for future long-term care. Long-term care insurance helps cover the cost of in-home care or nursing home services for individuals who become disabled or suffer infirmities due to advanced age. Insurance policies pay a daily rate to policyholders to assist with the cost of long-term care. Coverage typically begins when a policyholder cannot perform multiple activities of daily living (such as bathing, dressing, cooking, and eating) without assistance. The cost of insurance premiums depends on the policyholder’s age and health when they purchased the policy, and how long they pay premiums before triggering coverage.
Medicaid Coverage in Michigan
Many people obtain assistance with the cost of long-term care by applying for Medicaid benefits in Michigan. However, Medicaid has strict income and asset restrictions. People who apply for Medicaid frequently undertake various legal and financial strategies to bring their income and assets below the eligibility thresholds, such as spend-down strategies, lifetime gifting strategies, Medicaid-compliant annuities, and Medicaid trusts. In Michigan, the Medicaid program has a waiver option that allows individuals with long-term care needs to receive in-home services rather than moving into nursing homes.
Veterans’ Benefits
The Department of Veterans Affairs provides various financial benefits to veterans with disabilities connected to their military service. Veterans with service-connected disabilities who require assistance with activities of daily living may qualify for aid and attendance benefits, which provide financial payments to help with the cost of in-home care or nursing home services. Surviving spouses of disabled veterans can also qualify for aid and attendance benefits when they require long-term care.
Life Insurance Conversions and Hybrid Policies
Some life insurance policies allow policyholders to convert the policy to a long-term care insurance policy through a life settlement or by paying accelerated death benefits. Life insurance policies with a conversion option can provide individuals with flexibility, giving them a financial resource for long-term care if needed; if a policyholder does not need to convert their policy, they can leave the death benefits for their loved ones.
Legal and Financial Planning Tips
Individuals seeking to develop a plan to pay for long-term care should work with elder law attorneys and financial planners knowledgeable about Michigan laws and regulations. Early planning can provide individuals with the broadest array of options and allow them to avoid unexpected financial crises caused by sudden disability from injury or illness. However, even people who suddenly require long-term care have options for affording such care.
Long-term care planning should also address managing a person’s financial, legal, and medical affairs. A long-term care plan that integrates into a person’s estate plan may incorporate legal tools such as:
Contact a Long-Term Care Planning Attorney Today
When you or a loved one needs long-term care, working with an experienced attorney can help you evaluate your options for affording the cost of care. Contact Keating Law, PLC, today for an initial consultation with a long-term care planning lawyer to learn how to pay for long-term care in Michigan.