How to pay for nursing home care in Maryland: this is a common concern of so many families as their parents get older. In this article, we’ll cover the three main ways you can pay for nursing home care in MD, and a few options you may not have considered.
And, we have a companion video below to guide you through the process. Be sure to watch it below and subscribe to our channel on YouTube for more Maryland Estate planning videos.
How To Pay For Nursing Home Care in Maryland | #1: Private Pay
The first way is private pay.
Private pay is exactly how it sounds: you pay your way through the nursing home for as long as you are there.
Recent stats say that the average stay at nursing homes is about three years. Half of people in nursing home care pass away within the first 60 to 90 days and the other half go on to live as long as six years or longer in a nursing home.
Combining these numbers is how we get the three-year average.
But Can You Afford To Privately Pay For Nursing Home Care in an Expensive State Like Maryland?
Nursing homes can cost anywhere from $10,000, $12,000 and we’ve even heard as high as $15,000 per month.
So that’s a lot of $10,000 $12,000 and $15,000 months over the course of potentially many years to pay. This is $120,000-$180,000 per year, an exceptional salary for a family in Maryland. It’s a LOT to spend on nursing home care just for yourself or a loved one.
But, Private Pay Works for Some Families
Some people are perfectly comfortable with self-insuring or private paying their way through nursing home care.
Half of people in nursing home care pass away within the first 60 to 90 days and the other half go on to live as long as six years (or longer)
Think about all the assets that you have: your house, your investments, your life savings – everything that you’ve worked for. All of those things. Could potentially be liquidated if you have to pay this 6-figure cost for multiple years if you’re going to choose to self-pay or self-insure yourself for nursing home care.
How To Pay For Nursing Home Care in Maryland | #2: Long-Care Insurance
The second way you can pay for nursing home care is through a long-term care insurance: long-term care.
Insurance is a wonderful product and we encourage a lot of our clients to seek long-term care insurance if they don’t already have it.
Do You Understand What’s Covered Under Your Long-Care Insurance Policy?
However, if you do have long-term care insurance, be sure to know what the terms of your policy are. So many people come to us and say, well, they’re covered for nursing home care because they have long-term care insurance.
But they don’t understand the product that they’ve been sold or the product they’ve been paying for all these years.
Long-Care Insurance Has Changed Over The Years.
In long-term care when insurance first came on the scene, it was a great investment. You had a five-year plan that covered a specified amount per day in the nursing home.
Then over time, the insurance companies started losing money on long-term care insurance policies. What did they do? They raised the premiums. And for many people, the increase in the premium wasn’t feasible and didn’t fit into their budgets, especially in a state like Maryland with a relatively high cost of living.
Over time, the insurance companies started losing money on long-term care insurance policies. What did they do? They raised the premiums
So they decided that they wanted to continue paying the same amount they always had. Yet, this resulted in lesser coverage.
What was once a five-year policy turned into a four year policy, which then turned into a three-year policy or less. And the daily benefit could have been $300, which turned into 200, turned into $150. You get the picture – the value of these policies dropped steadily over time, forcing more out-of-pocket costs.
If you are going to rely on long-term care insurance to pay for your nursing home care, well, then you better know the kind of coverage that you have:
- How many years?
- What’s the daily benefit?
- Will this cover everything that you expect or need?
If you don’t have long-term care insurance, you may want to look into it. There is a certain level, at certain age groups, at which long-term care insurance no longer becomes a good investment, but you should always consider the possibility of long-term care insurance.
How To Pay For Nursing Home Care in Maryland | #3: Medicaid
The final way to pay for nursing home is through Medicaid. Medicaid is long-term care insurance provided by the government. In order to qualify for Medicaid, you have to meet certain asset and income qualifications. What that means is you can only have so much money in your bank account or only have so much income per month in order to qualify for Medicaid.
Medicaid in Maryland is a means tested government benefit.
Now there are some people who plan ahead. try to protect their assets, their house, their life savings in the event that they go into a nursing home that perhaps those assets wouldn’t be counted against them as they try and qualify for Medicaid. Even if you’re in the nursing home or your parent is in the nursing home, it is not too late to try and protect your home and life savings from Medicaid, especially if you’re a Maryland resident.
Need Advice on Paying For Nursing Home Care or Planning Your Estate?
At Chesapeake Wills & Trusts, we’re here to help you protect your family, assets and life savings.
As Maryland estate planning attorneys, we are passionate about educating our clients so they can make the right decisions to secure a safe, happy, financially stable future.
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