Cost—yikes!

[Anonymous]

Anonymous wrote:

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Anonymous wrote:
Was there a point to your father sharing this with you? As in, is he worried he might run out of money? Is he hoping you might help?

There are government homes, OP, but a lot of them are not pleasant. There are waitlists, and they do a thorough check of assets, including a look back period of several years, to make sure you haven't squirreled wealth away somewhere.

Hmm, there are not government homes, but nursing homes that take Medicaid for residents. Yes, you complete forms and dissolve your assets (not all if one of the couple is not a resident - "community spouse").

I think there are challenges with the spouse being allowed to keep much in assets beyond a house. In other words, getting Medicaid for one half of a couple puts the other half at financial risk.

The community spouse can keep half of all assets... up to $100,000. So if you and your spouse together have $800,000 in, say, retirement accounts... you need to spend the $700,000. Spouse keeps $100,000. Spouse's income (pension, SS, etc) is not counted for Medicaid eligibility, though. Just assets.

[Anonymous]

Anonymous wrote:Can anyone comment on the 1099-type forms that you get from the Assisted living place for tax deductions (for medical care exceeding 7.5% of AGI?)

I’ve had two SILs go through this. One’s mother had a golden LTC policy and only had to pay 2 months per year out of her own invested and growing assets.

Another SIL told me that her parents received large statements on both AL and skilled nursing rooms, such that the 7.5% of AGI deduction meant that they really didn’t go through much of their assets. At the time, their CCRC buy-in was in the $400k range and SIL got 90% back for the estate settlement.

Are there any other positive experiences? I’m thinking that the OP might have this experience depending on her parents’ income.

You can deduct the cost of long term care from your taxes if the patient is "chronically ill" and meets the following criteria:

https://www.irs.gov/pub/irs-pdf/p502.pdf

Long-Term Care

You can include in medical expenses amounts paid for qualified long-term care services and certain amounts of premiums paid for qualified long-term care insurance contracts.

Qualified Long-Term Care Services

Qualified long-term care services are necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services (defined later) that are:

1. Required by a chronically ill individual, and
2. Provided pursuant to a plan of care prescribed by a licensed health care practitioner.

Chronically ill individual
An individual is chronically ill if, within the previous 12 months, a licensed health care practitioner has certified that the individual meets either of the following descriptions.

1. The individual is unable to perform at least two activities of daily living without substantial assistance from another individual for at least 90 days, due to a loss of functional capacity. Activities of daily living are eating,
toileting, transferring, bathing, dressing, and continence.

2. The individual requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment.

Maintenance and personal care services.

Maintenance or personal care services is care which has as its primary purpose the providing of a chronically ill individual with needed assistance with the individual’s disabilities (including protection from threats to health and safety due to severe cognitive impairment).

So yeah, if someone is in assisted living because they can't take care of themselves, at least they can get a pretty big tax deduction.

[Anonymous]

https://www.vox.com/the-goods/22639674/elder-care-family-costs-nursing-home-health-care

The staggering, exhausting, invisible costs of caring for America’s elderly
As millions “age in place,” millions more must figure out how to provide their loved ones with increasingly complex care.

[Anonymous]

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Anonymous wrote:OP, make sure you see if the CCRC has any sort of safety net for when people run out of money. I was looking into a few options for my parents, and the communities had a special fund for exactly that. It's one of the reasons I plan on buying into a CCRC when I'm older. I don't want my kids to have to worry about moving me if I outlive my money.

My parents CcRC functions like that. The huge entry fee covers you if you “outlive” your money. You live for free and they don’t include ss in it.

You aren't living there for free. You are prepaying.

Yes it’s not free! You pay $1M or so as an entry fee.

We chose to avoid CCRC and pay monthly.

We only paid ~$400K total for my parents entry into their 5 star facility. Yes, you prepay. But the fee for service plan is only $120K less and the monthly fee is $2k less. So yes you "save", about $24K/year and the $120K. But here are the rates should you need advanced care:

$248/$290/$402 per Day (Assisted living, Memory care, nursing care)

And if you need to go to Nursing care or assisted living temporarily, you would still be paying for your apartment and the advanced care. So $12K per month for nursing care and you might still be paying $5K/month for your IL apartment. If either parents ends up in Nursing care, it will only take 3.4 months in a year to pay for the monthly price difference for the year.
A year in memory care for one parent and the other staying in IL will just about pay the difference in entry fee, and 14 months for assisted living. So we hedged our bets that we will pay less this way. Not a guarantee, but highly likely. Either way, happy to spend the extra $120K up front and the extra $2K /month for the comfort of knowing it wont cost us anything extra ever should 1 or both parents needs advanced care, and that we don't pay extra to keep one in IL apartment either.

The way I view it, the CCRC is most likely making money either way, but we come out ahead by prepaying. My parents both come from families that live into their 90s+, even with very poor health. My parents are much healthier than their parents were and they all lived to 90+. So I can see 5+ years in "advanced care" for one or both of them. And it will be nice to know they only pay $7K total per month (plus maybe an extra $300 each for food), not $12K+ EACH

They are running a business. The business will go bankrupt if all the people got more than they paid.

Obviously! But we are happy to have my parents spend down all/most of their savings to provide excellent care(5 * life for the last 10+ years of their life). Sure they are "overpaying" but they are living very nicely (much nicer than ever before in their life) and are well taken care of, even in IL. I'd rather they spend on that than leave me an inheritance

[Anonymous]

Anonymous wrote:So we save $$ our entire lives just to give it to the corrupt skilled nursing industry?

If you need care in your elderly years, yes. Some will make it to 90+ in Independent living, others will need more advanced care earlier.
My parents are 85 and still in IL.