Planning for Long-Term Care
Posted by:  Bonnie Schradel

We spend our lives planning for our retirement, contributing to our 401(k), making wise investments, and planning our future activities and travel plans. We look forward to being able to grow old with our loved one in our home. Once we retire, we stop planning for our retirement and begin to enjoy our time. Unfortunately, we often fail to plan for Long-Term Care.

With Medicare benefits beginning at 65, and Social Security benefits becoming accessible as early as age 62, most individuals choose to retire in their 60s. At retirement age, less than 20% of retirees have difficulties with activities of daily living. Unfortunately, these difficulties increase with age.  According to Wettstein and Zulkarnain (2017), over half of individuals will have limitations with daily activities after age 85. When these limitations exist, cost of care becomes a financial burden if proper planning hasn’t been completed.

A study completed in 2012 showed the annual cost of a semi-private room in a skilled nursing facility averaged $81,030.00 (Friedberg, Hou, Sun, & Webb, 2014). This cost only represents the care, room, and board at a facility. This amount quickly escalates with the rising costs of medications, Medicare supplemental rates, durable medical equipment, and other ancillary costs are considered. At this rate, all of our retirement planning can quickly be wiped away.

When discussing how to pay for the costs of long-term care, many sources will indicate that without Long Term Care insurance coverage, and often in addition to a Long Term Care policy, one’s lifetime savings will have to be exhausted to qualify for Medicaid. Medicaid is the program that pays for the remaining costs of long term care that one’s income cannot cover. Once an individual learns that they need to exhaust their resources to apply for Medicaid, critical mistakes occur that jeopardize Medicaid eligibility. Often times this means that the individual who is in desperate need of nursing home care, no longer has the resources to pay for the care, and cannot qualify for Medicaid benefits due to lack of proper planning.

The Medicaid program has rigorous guidelines on how assets are allowed to be used. Medicaid has a five year look back period. The State of Illinois reviews every account that one has owned, or co-owned during the last five years. Any gifts or assistance the applicant has given to a family member is viewed by the State to have been done in order to qualify for Medicaid and penalized. During a penalty period, the State will not pay for costs incurred from Long term care. The penalties are dollar for dollar, meaning that if a mom helped her son with the cost of a car repair at $1200.00 and replaced their daughter’s roof costing $14,000.00 during the last 60 months prior to applying for Medicaid, the State totals those costs and indicates that they will not begin paying the cost of care until $15,200.00 has first been paid by the applicant to the facility. This does not even consider additional penalty periods assessed by the State when the daughter does shopping for mom and dad, and is reimbursed without keeping receipts. In sixty months’ time these penalty periods can accumulate to levels that cannot be cured.

For these reasons, it is critical to plan for long-term care costs. Attorney Gina Salamone and her Paralegal Bonnie Schradel have close to 30 years’ combined experience in working with the Illinois Medicaid program. We can help you navigate the Medicaid maze, cure mistakes that have been made in the past, and preserve some remaining resources for future needs not covered by Medicaid.

For more information and to begin your planning today, contact our office at (630) 221-1755.


Friedberg, Hou, Sun, & Webb (2014) Long-Term Care: How Big A Risk? Retrieved September 21, 2017, from Center for Retirement Research at Boston College:

Wettstein, G., & Zulkarnain, A. (2017, June). How Much Long-Term Care Do Adult Children Provide? . Retrieved September 21, 2017, from Center for Retirement Research at Boston College.