Nursing Home Costs Continue to Climb

The average cost of a private room in a nursing home in the U.S. is $70,080 a year, or $192 a day, according to the 2004 MetLife Market Survey of Nursing Home and Home Care Costs. The highest rates for a private room in 2005 were reported in the state of Alaska, where the cost is $204,765 a year or $561 a day, on average. The lowest rates were found in Shreveport, Louisiana, at $36,135 a year or $99 a day. The average length of stay in a nursing home for current residents is 2.4 years, which makes the average cost of a nursing home stay in a private room approximately $168,192.

Many elders don't realize that planning to protect one's assets from nursing home costs can be accomplished before or during a loved one's nursing home stay. This is due to a misunderstanding of the three or five year look-back period that MassHealth examines for gifts of assets to family or trusts. Gifts can still be made during this look-back period. The gift will have to be disclosed to MassHealth upon application and may result in an additional wait for eligibility, i.e., penalty period, or may allow for immediate eligibility. The amount of the gift and the date gifted will determine whether one must wait for eligibility or not. MassHealth will determine the wait period by dividing the fair market value of the gift by $6960 per month.

For example, if you gifted $69,600 to a child on September 15, 2004, MassHealth would determine a wait period of 10 months, beginning on the first day of the month gifted, September 1, 2004. The elder would be eligible for MassHealth assistance on July 1, 2005. If one enters the nursing home prior to July 1, 2005, the family would need to private pay through June 30, 2005. If the elder enters the nursing home after June 30, 2005, the gifted assets, although disclosed to MassHealth, would be protected. One can even make gifts of $6960 per month to the family while an elder is in the nursing home, as long as the family private pays for each gifted month.

It is never too late to protect your assets from nursing home costs. Something can always be saved. Seek out competent advisors who can assist you in this difficult time of your life.

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