How to Save on the Cost of Nursing Home Care

Managing the high costs of nursing home care can be a challenge. However, with careful planning and knowledge of the resources available to you, you can employ strategies that may significantly reduce these expenses. Here’s how:

1. Long-Term Care Insurance: This specialized insurance can offset a substantial portion of the cost of nursing home care. Ideally, purchasing a policy when you’re younger and healthier will give you the best rates, but remember that premiums can be high and benefits can vary based on your policy.

2. Veteran’s Benefits: If you or your spouse served in the military, you might be eligible for long-term care benefits through the Department of Veterans Affairs. Be sure to investigate these resources as they can provide significant financial support.

3. Medi-Cal: For those in California with limited income and resources, Medi-Cal can cover a significant portion, if not all, of the cost of nursing home care. However, eligibility rules are complex, and there’s currently a 30 month look-back period for asset transfers, so careful planning with a knowledgeable advisor is essential.

4. Purchase an Annuity: If a spouse is entering a nursing home, purchasing an immediate annuity can convert countable assets into an income stream for the spouse remaining at home. This strategy can help the institutionalized spouse qualify for Medi-Cal sooner. However, this is a complex planning strategy that should only be undertaken after consulting with an experienced and qualified elder law attorney.

5. Negotiate Rates: While this might not always be an option, in some cases, you might be able to negotiate the daily rate of a nursing home, particularly if it’s not at full capacity. It doesn’t hurt to ask.

6. Share a Room: Opting for a semi-private room instead of a private room can lower the cost of nursing home care. While this means less privacy, the savings can be significant.

7. State Assistance Programs: Some states and local government agencies offer non-Medi-Cal programs to help pay for long term care. These programs may have different eligibility rules than Medi-Cal, potentially providing help to those who might not qualify for Medi-Cal.

8. Life Insurance and Hybrid Policies: Some life insurance policies offer a “living benefit” or “accelerated death benefit” option, allowing policyholders to access a portion of their death benefit to cover long-term care costs. New “hybrid” policies allow for lifetime distributions for long term care and death benefits for benefits not used before death.

9. Tax Deductions: If you or your loved ones are paying for nursing home care, you might be able to deduct these costs on your taxes. Always consult with a tax advisor to understand your options.

10. Reverse Mortgage: For seniors who own their homes, a reverse mortgage can provide income by converting home equity into cash. This money can then be used to pay for nursing home care.

While these strategies can help, it’s crucial to involve an experienced and qualified elder law attorney in your planning process. They can help you navigate the complexities of reducing nursing home costs while protecting your assets and financial health.