Pres. George W. Bush signed the Deficit Reduction Omnibus Reconciliation Act of 2005 in February 2006. The new law tightens Medicaid's long-term care eligibility rules and allows for the nationwide expansion of long-term care partnership programs.

The new partnership policies allow consumer to protect a portion of their assets that they would the new partnership policies allow consumers to protect a portion of their assets that they would typically need to spend down prior to qualifying for medicaid coverage ensuring the more of the funds that are accumulated for retirements will be protected.

On August 17, 2006, the President signed into law The Pension Protection Act of 2006. Individuals owning annuity contracts can now have long-term care riders added with special tax advantages.

While Medicaid should be used as a last resort to pay for long-term care, there are two cases where this may be the only option for families protect assets. The first example is a married couple.

In the case of a married couple, the federal law allows for a division of assets to occur at the time that either spouse enters a nursing home. Simply put the couple, is able to divide their assets by two and the healthy spouse is able to keep half of the assets up to $115,920.

Aid and Attendance can help pay for care in the home, nursing home or assisted living facility. A veteran is eligible for up to $1,732 per month, while a surviving spouse is eligible for up to $1,113 per month. A couple is eligible for up to $2,054 per month.

Book Excerpts

  • The one thing most of us would rather avoid than discuss, is the topic of long-term care. The need for long-term care can cause tremendous devastation to individuals and families, and is the number one reason why people outlive their money.

  • The national average daily rate for a private room in a nursing home is $229, while a semi private room is $205 up from $219 and $198 respectively in 2009. Privately paying for long-term care means that senior would have to find an additional $28,560- $100,000 per year in their budget for just one person to receive care. Most of us, seniors or not, could not afford to privately pay for long-term care year after year.

  • Although we see the number of male caregivers increasing all the time, the fact remains that, when it comes to long-term care for family members and their spouses, today women carry the weight. Daughters, daughter-in-laws, wives, sisters, and nieces often accept role of caregiver for aging adults in the family. Across the US there are women commonly referred to as the sandwich generation, who are playing dual roles in their families. They often mother themselves in addition to caring for their own aging parents.

  • One out of every four families in the United States today are caring for an aging adult in some way. For some families, that means 24-hour live-in care. Other families that means that mom needs a ride to the doctor or to the grocery store. In the next 10 to 20 years it is projected that eldercare will replace childcare as the number one issue for working adult employers will likewise be affected.

  • Until recently, the thought of using a life insurance policy to pay for long-term care expenses was unthinkable. However with the first baby boomer reaching the milestone of age 65 on January 1, 2011, the insurance companies have begun offering long-term care coverage as a rider on term life policies as well as whole wife and universal life policies.

  • While most people use their IRA to supplement retirement many times waiting until age 70 1/2 at which point the mandatory required minimum distribution rules apply, some people have chosen to take a portion of their IRA and fund an IRA based, long-term care policy.

  • One of the most important things to set in motion is the legal paperwork! A durable power of attorney for healthcare and a financial power of attorney are essential, along with and advanced directive or living will.