Bill Clinton – “I don’t think that it should be a precondition that, if a husband must go into a nursing facility, that his wife should have to go into the poorhouse.”

Relying on private pay (paying out of pocket) and Medicaid may put you into the poor house. Many people make the mistake of thinking that they’ll just be able to use Medicaid for their care needs, but it is only for those who are low income and on January 1st, 1997 the US government made it illegal to give away assets to someone other than your spouse, in order to qualify for state assistance with long term nursing care. The law states that anyone who is “knowingly and willingly disposing of become eligible for Medicaid” then they could spend up to ten years in prison and pay a $25,000 fine, depending on their state of residence. It has even recently been pointed out that the law may extend to “anyone who aides, abets, counsels, commands, induces, or procures the commission of an offense by another.” This would include those who are legal counsel and family members who became involved in the came in any way.

Another way in which the government designs provisions to encourage the purchase of private long term burning home care and at-home care insurance is by bestowing tax-favored status on these policies. Supporters of the provisions, members of the Kennedy-Kassebaum Health Insurance Reform Bill passed in August of 1966. They say that these tax incentives for private insurance will reduce the runaway cost of medicaid. Because of this many people are considering taking their lives and care into their own hands and buying long/short term care insurance to protect against the unexpected that comes with growing older.

These changes that were made before anyone who’s now looking into what they want for their long term care has been affected by these laws. Because of these laws private long term care insurance is their best bet now and nursing homes and care facilities are going to benefit as well as be required to keep high ratings in order to attract more people which will keep the quality of care received higher as well. Care facility operators stress that welfare (Medicaid) doesn’t fully pay for the labor intensive work required by those affiliated with Alzhiemers and many other diseases whereas higher-paying insured and private pay residents have to subsidize those on the paying with inflated rates, which are getting higher every year. 

The tightening of laws and regulations means less and less loopholes for people to use in order to receive Medicaid and the newest being the Deficit Reduction Act (DRA) that was signed into law on February 8th, 2006. It is plain to see that in the field of retirement financial planning has changed and continues to demand more and more money each year in order to do so. Don’t forget that even with everything said above, your future is still up to you and making the correct decision now can help or hinder your life in the long run.