How Much Is Long-Term Care Generally in Arkansas? Can the Average Person Afford to Pay Out of Pocket for Such Costs?
The average person cannot afford to pay out of pocket because the cost of care is so expensive. When we talk about long-term care in Arkansas, we’re talking about basically four types of care: episodic or occasional homecare, around-the-clock homecare, assisted living, or skilled nursing care with a high level of support.
The average cost of a nursing home in Arkansas is about $6,000 a month, so we’re talking about $72,000 a year. Most seniors are living on fixed income or Social Security, and there’s no way they can afford that. Even if they draw from their savings, if they have any, they will quickly deplete whatever is there. Generally speaking, most of my clients own a home and live on Social Security or maybe a pension if they’ve worked for a larger company; it wouldn’t even take them three to five years to run out of money. Good assisted living facilities will run slightly less than that, but you’re still talking $50,000 to $60,000 a year. Let’s say you don’t want to live in a facility: you’ll spend upwards of $12,000 to $18,000 a month or more to stay in your home. Unable to afford that, most people are forced into selling their homes and moving into an assisted living facility or moving into a nursing home. Overall, your long-term care will cost you between $50,000 to as much as $150,000 per year. That’s a lot of money.
How Can We Plan to Qualify for Medicaid to Help Pay for Long-Term Care for Ourselves or Our Loved Ones?
This is the kind of question that I present to my clients who are not independently wealthy, those who don’t have money to self-pay, those who don’t have long-term care insurance and can no longer qualify because of their age or health issues, or those who don’t have the resources to pay for long-term care insurance.
For individuals or married couples, we can do irrevocable trust planning, which is the best practice for protecting assets from the cost of long-term care. The downside is that you need to preplan five years in advance. Irrevocable trust planning allows you to transfer your primary assets (i.e., your home or your liquid assets) into an irrevocable living trust that will remove those resources from the Medicaid resource list after five years. That means those assets are out of mind as far as Medicaid is concerned when it comes to eventually qualifying for Medicaid. Basically, what we tell clients is that we’re going to advance their legacy plan a little bit ahead by creating a trust and putting all their legacy issues into that trust. We can make either their children or another person of their choosing the benefactors, and while they’re living, if they need any of that money to live off of, their benefactors can help.
Overall, the best way to plan to qualify for Medicaid, to help pay for long-term care, is what I call a Medicaid asset protection trust. That would encompass all of the things I’ve just described and is what I consider to be the best practice in this area.
For more information on Elder Law in Arkansas, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (501) 550-1114 today.
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