2019-2020 Health Care Guide

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an insured to undergo under- writing to qualify. Any agent you work with should be able to explain the differences or choose another agent. lastly, one may qualify for gov- ernment benefits if a qualifying veteran (or spouse of a veteran) or if he/she meets the income/asset test of family Care (assisted living facilities) or Medicaid (skilled nursing facilities). To qualify for family Care or Medicaid one generally must have $2,000.00 or less in countable assets and income less than the cost of care. Many facilities do not accept family Care or Medicaid. furthermore, many accepting family Care require a private pay period prior to allowing one to go on family Care. It is very important that any plan implemented, to qualify one for family Care or Medicaid, take into considera- tion the care plan, all options available to pay for the care and a strategic plan to minimize taxes, legal, administrative expenses, and opportunities to prevent impoverishment in any or all of these goals. The finan- cial, tax, legal, and care plans must all work together to maxi- mize the results. W. Ryan Zenk, JD, CFP ® Elder Law Center of Wi, LLC 125 N. Executive Dr., Ste 210 Brookfield, WI 53005 262-812-6262 www.eldercarecenterofwisconsin.com

hOW TO PAy fOR lONG TERM CARE? The second option, long term care insurance, has changed drastically over the past sev- eral years. Many carriers no longer offer long term care insurance because the product was underpriced and carriers lost large sums of monies. It is still available from some carriers including newer options. One such option is a type of life insurance policy that pays a benefit if needed for care and pays a death ben- efit if never or only partially used for care. One good thing about these policies is the insurance company does not keep the money, either the client receives monies for care expense or it goes to his/her beneficiaries as a death bene- fit. These types of policies typically require prepayment of the premium over one to seven years. After this, no additional premiums are ever paid. Other policies (partner- ship policies) allow an indi- vidual to protect assets equal to the benefit of the policy. for example, a policy with $200,000.00 benefit allows the family to protect $200,000.00 of assets. Still others are the traditional annual pay policies with a set benefit. These are the traditional use it or lose it policies. All of these require

he cost of long term care is very expensive. It can range from hundreds to tens of thou- sands of dollars per month. Many studies indicate the odds of a 65 years old needing long term care, at some point, is over 50%. So how can one pay for it? The answer is there are 3 ways to pay for long term care. first, one can pay with one’s own assets until either broke or deceased. Second, one can use long term care insurance if one was smart enough or fortunate enough to obtain such insur- ance while he/she was insur- able. Third, one may qualify for governmental assistance through the veteran’s Administration, family Care or Medicaid. let’s look at each option further. Private pay will require assets be liquidated (or already liquid i.e. cash) and a check written to caregivers typically on a month- ly basis. The liquidation of assets such as IRAs or appreci- ated assets may be a taxable event though typically the tax liability is completely or mostly offset by the medical deduction generated by spending on care costs. Paying privately will reduce and may eliminate any inheritance for family or chari- ties. Worse yet, this may cause an individual to go broke while alive or a healthy spouse to become impoverished. Are there ways to prevent spousal impoverishment – yes with proper planning this can be pre- vented.

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