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Don’t Let Your Senior Loved Enter The Long-Term Care, “Black Hole.”

In this past week, I have had many clients approach me with long term care placements involving potential shortages of funds. All of them were approaching what I call the long-term care “black hole.” Let me explain exactly what I mean by that as it will vary according to the level of care your loved one needs.

If your loved one needs skilled nursing care the costs in Illinois run about $6,000 – $9,000 a month. Some of the Alzheimer’s or dementia units can cost more. Right now, It is taking Medicaid (The Federal program designed for those who cannot pay for long-term care and administered by each state) close to a year to reimburse the nursing homes for residents who are participants in the Medicaid program. Therefore, most of the nursing homes want to see a resident pay privately for a year before submitting an application for Medicaid. Even the nursing homes that deliver less than desirable care are not making access to public aid easy. So, the bottom line is, if your loved one going to need nursing care, you should try to set aside at least $72,000 for their care if you’d like them to enter a better nursing home . If your loved one has less than that, they are in the black hole. You should expect some difficulty with the placement.

In the case of skilled nursing care, the number for the black hole is much easier to quantify. If your loved one needs assisted living, the amount of funds needed is more difficult to pinpoint. That’s because you have no way of knowing how long your loved one will remain at that level of care. Assisted living in Illinois can run $3,500 to $6,000 a month. I have seen some of the memory care units run as high as $7,200. You will have to make some financial assumptions if your senior may need nursing home care down the road.

To further complicate matters, if the senior is at the independent living level, you can pay anywhere from $1,500 to $4,000.

Since no one has a crystal ball, you can use the above figures to gage whether your loved one will be in the black hole in the near future or not.

REAL LIFE STORY I was given a referral by a realtor involving an older couple living in an apartment building. The care was being given by a grandchild and daughter who occupied apartments in the building. The seniors were in their mid-eighties. Both were candidates for assisted living according to my assessment. However, one was needing much more physical care, while the other was experiencing memory issues. Personal circumstances will require that they be moved to a long-term care community.

Upon assessing their finances, I found that their savings were less than $20,000, and their monthly income less than $3,000. The saving grace was that the apartment building was owned by them. Right now, we are awaiting the assessment of the property value. The only saving grace to avoid the big “black hole,” will be to seek a bridge loan and rely on the sale of the property. In order to enter continuing care community that will keep them for life, they will need to pay privately for at least one year. I have knowledge of a community that will accommodate them if the sale of the home yields at least $150,000 and a bridge loan can be obtained. In addition, one member of the couple may need nursing home care more quickly than the spouse, so some assumptions will need to be made. With the real estate market being in an unstable state, we may still be facing the, “black hole.”