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Is the Pressure Really Off?

Charlie had been transferred to a nursing home when his wife Doris called.  Medicare was paying for his care but she had just learned coverage would stop in another week and the private pay cost of care was $11,000 per month.  I could hear the panic in her voice when she said the $200,000 of assets plus her home was all she had.

 I explained to Doris that the home is an exempt asset which she can keep as long as she continues to live there but the $200,000 is countable and must be spent down to $100,000.  Some of that money must be spent towards nursing home care but I told her that we could also help her spend the rest in a way that most benefits her since the amount she is entitled to keep is not much for her to live on.  She hired us to help her get through the spend down process and file the Medicaid application and we got to work.  Several months later, we were just about ready to file the application and then Charlie passed away.

 Doris had been through a lot in the past year since Charlie’s health had reached a crisis point.  But even so, his passing was quite a shock after 50 years of marriage.  I told her that, obviously, we don’t need to file for Medicaid, but that we should discuss the next steps after things settled down for her a bit.  She appreciated that and I made a note to reach out to her in a month.

 Actually, about 6 weeks later we connected.  Her first statement to me, one I hear often, was “I guess we don’t need to do the planning anymore”.  That’s a very natural response.  The immediate crisis which caused her to reach out to us – facing a $132,000 a year long term care expense – was no longer a concern.  The pressure was off, so to speak.  What I told Doris, however, was the opposite. 

 She and Charlie had been totally unprepared and it had cost them.  Doris was down to $100,000 in assets and a house worth $300,000.   With Charlie’s passing she lost half of their income – one Social Security check and 50% of Charlie’s pension.  Doris would have to make this money last for the rest of her life, including covering her own long term care needs.   These were the negatives.  But she had one positive.  She is healthy.  So time is on our side – but here is the key – provided we take advantage of it.  Next week I’ll tell you what I told Doris.