Assume that Roger Smith, a WWII veteran, is moving into an assisted living facility so that he can get some help with his meals, dressing, and taking his medications. The assisted living facility that he is about to enter charges $2,750.00 per month, which amount includes all of his meals. As for the medication and dressing services, Roger expects to pay $250.00 per month. Roger's total out-of-pocket monthly medical expenses, including the assisted living charges, doctor's visits, eyeglasses, hearing aid batteries, and Medicare supplemental insurance, equal $3,300.00. With personal expenses added to the mix, including: clothing, gifts, and telephone, Roger's total monthly expenses reach $3,500.00.
Having previously sold his family home, most of the furnishings, and automobile, Roger has $160,000.00 in savings. With only $1,200.00 of monthly social security and pension income, Roger's life savings will be exhausted at the rate of $2,300.00 per month, lasting only 69.56 months. At 77 years of age, Roger is concerned that his life savings will not survive him, and he may be forced to leave the assisted living facility.
After consulting with an elder law attorney who specializes in VA benefits, Roger learned that he could qualify for a $1,644.00 monthly VA pension benefit if he reduced his life savings to $30,000.00, purchased a $7,500.00 irrevocable funeral plan, implemented a $3,500.00 comprehensive plan, and invested the balance of his life savings, or $119,000.00, into a Medicaid Compliant Annuity ("MCA"). With the MCA being structured over Roger's Medicaid life expectancy of 9.14 years, he was guaranteed to receive 109 monthly payments of $1,308.00, for a total pay-out of $142,572.00.
As a result of the plan, without jeopardizing his life style or his ability to pay for his assisted living care, Roger was able to stretch his life saving from 69 months to 152 months. Finally, it was Roger's attorney's opinion that if Roger needed to enter a nursing home facility for custodial care, with very little planning, Roger could easily qualify for Medicaid benefits.
This is an issue that almost no one else is talking about. I think that the great majority of American's simply do not understand long term care either. The feds really could help themselves by promoting it somehow, otherwise the responsibility falls to them.
Posted by: tucson carpet cleaners | June 30, 2009 at 01:04 AM
I have to agree with what was stated above. This grave issue has to come out and dealt with once and for all - for old Americans sake.
Posted by: B.A.@AnnuitiesProsandCons | October 20, 2009 at 03:09 AM