Finding out the hard way, one family’s struggle

AARP shared the story of Patricia McCormack, whose mother was suffering from the initial stages of Alzheimer’s disease. Living in another state, the costs quickly escalated when having to travel to care for her mother, then finding the treatment would most likely include care in a locked memory care facility. These costs were over $108,000. After the treatment, her mother needed to reside in assisted living facility, which was $84,000. Neither the treatment or assisted living facility was covered by Medicaid.

After giving up everything and moving to the West Coast to ensure her mother was taken care of, the thought of these long-term care costs were both startling and frightening. The only solution was in getting a home equity loan on her mother’s property, which after depleted would allow Medicaid to pay for the rest. As the caregiver, Patricia saw this as her only reprieve. Patricia ended up being disabled a few years later from hepatitis C and is struggling to make ends meet. This is a likely scenario for a number of aging seniors, their caregivers and others who have become caught in the maze of astronomical long-term care costs that they are unable to afford.

Avoid being caught unprepared for assisted living costs

When facing high long-term care costs, this can be stressful for the senior and their families who will bear the brunt of these expenses. If Patricia’s mother had a life insurance policy in place that could have been utilized for a life settlement, they would have had some capital to ease the strain. Reverse life insurance is an outlet where aging seniors can utilize the case value of their policy while they are still living, which is valued based on health and the policy details. This can save time, money, and provide a peace of mind knowing some, if not all, costs are covered.

How does the Medicaid life settlement work?

A medicaid life settlement option is unique in that buyers are sometimes interested in policies that are less than $500,000. The proceeds of the sale are placed into an account that can only be used for long-term care. This works well for heirs and beneficiaries, who can receive up to five percent of the face amount, and the proceeds that have not been used upon death. These funds can also be used for in home care and elderly care at home while bypassing the requirements of Medicaid.