Navigating long-term care costs requires strategic planning to protect assets and ensure quality care. This episode of The Estate Blueprint, Planning Your Future with Tom Begley examines Medicaid eligibility in New Jersey, debunking myths about spending down all assets to qualify. It explores the types of care Medicaid covers, the five-year look-back period, and strategies for last-minute planning, emphasizing the importance of early preparation to preserve financial stability.
Why is planning for long-term care costs important?
Planning for long-term care is critical, as 70% of individuals require such care during their lifetime, with half needing institutional settings like nursing homes or assisted living facilities. Potential changes to Medicaid laws, currently under debate in Congress as of August 2025, underscore the need to stay informed. Proactive planning ensures families can address the high costs of care while protecting assets accumulated over a lifetime.
What are the limitations of traditional insurance and Medicare for long-term care?
Traditional health insurance and Medicare offer limited support for long-term care. Medicare covers less than 1% of these costs, primarily for skilled care, such as rehabilitation after a stroke or surgery, for up to 20 days with a substantial co-pay thereafter. Custodial care, needed for conditions like Alzheimer’s or assistance with daily activities, receives no Medicare funding, highlighting the need for alternative solutions like Medicaid.
What types of care does New Jersey Medicaid cover?
New Jersey Medicaid supports three categories of long-term care: in-home care, assisted living, and nursing home care. Medicaid-certified nursing homes cover all expenses, including room, board, and medical services, after a required contribution from the recipient. Assisted living coverage is limited by available slots, which may delay eligibility if slots are full, requiring private payment until a slot opens.
What are the Medicaid eligibility rules and asset limits in New Jersey?
Medicaid eligibility in New Jersey requires individuals to have $2,000 or less in countable assets, such as bank accounts or investments, though personal effects and a home (for a community spouse) are exempt. Married couples benefit from additional exemptions, including a community spouse resource allowance, which protects a portion of assets. Strategic transfers, like moving the home into the community spouse’s name, can safeguard wealth without