Planning for the Next Stage


o you have a spare $400,000? You might need it to cover the cost of nursing home care for yourself or a loved one.

For families, navigating senior care is a sea of uncertainty. Proper planning is the key.

In the U.S., 1.4 million  people live in nursing homes, and more than 800,000 in assisted living facilities. As the Baby Boomer generation ages, those numbers are expected to more than triple by 2050.

Long-term care isn’t top of mind for most folks until they, or someone they love, need it. Many mistakenly assume it will be covered entirely by Medicare or a Medicare supplement.

“Proper planning is important not only to make sure that you get the care you need, but also to help ensure that you can pay for it while still providing for a spouse or other dependents,” said certified elder law attorney Andrew Sykes, of Sykes Elder Law, located on Washington Road.

Sykes recommends having a power of attorney (POA) in place to allow someone else to make decisions and manage financial affairs and healthcare directives. “A POA should have the proper provisions to allow for asset protection planning. Many standard POAs lack those provisions,” he added.

An estimated 70 percent of people who live to 65 will need long-term care sometime in their lives. So, what’s the cost and how do you pay for it?

The annual median cost for assisted living in Pennsylvania is $39,000, according to the Genworth Cost of Care Survey 2021. The cost for skilled nursing is higher, due to the higher level of care. The annual median cost of a semi-private room in a nursing home in Pennsylvania is $116,800.

According to, most long-term care patients start by paying out of pocket. They use private funds, like personal savings, pension payments, retirement accounts or life insurance policies.

Another option is long-term care insurance, which may help cover some of the cost. However, annual premiums can run an average of $3,700 for a woman in her 50s and $2,200 for a man of the same age, according to the American Association for Long-Term Care Insurance.

The majority of residents living in nursing homes are women over the age of 85 who may have spent several years in assisted living before needing higher level skilled nursing care.

Let’s take the case of an elderly widow in Pennsylvania, living in a semi-private room in a nursing home at a cost of $116,800 a year. Statistics show women live in nursing homes, on average, for 3.7 years, compared to 2.2 years for men. If you do the math, a nursing home stay could cost that woman $432,160.

According to the Centers for Disease Control and Prevention, 70 percent of nursing homes and 81 percent of residential care communities are for-profit organizations, making nursing homes a $146.9 billion dollar industry. Most are private pay, and over time can drain a patient’s life savings.

Some nursing homes accept Medicaid for payment. That’s important to know, since you may eventually spend down your assets, even if you’re paying out of pocket or with long-term care insurance. But don’t spend down too early, because that could adversely affect your ability to protect assets for your spouse.

“For Medicaid purposes, the amount of assets your spouse is allowed to keep is based on the value of those assets on your date of admission,” Sykes pointed out.

However, keep in mind, there’s a five-year look-back period which prevents someone from transferring their assets just to avoid being over the limit.

Something else to keep in mind: While a person’s home is usually exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s estate recovery program. According to the American Council on Aging, after a long-term care Medicaid beneficiary dies, Pennsylvania’s Medicaid agency will seek reimbursement of care costs through whatever remains of the deceased person’s estate. So without proper planning, the home will be used to reimburse Medicaid, rather than going to family as inheritance.

That’s why preserving assets ahead of time becomes vitally important.

“Medicaid planning can be an extremely important tool to make sure care in a nursing home can be paid for, while protecting assets for a spouse or other loved ones. The look-back and spend-down rules are complex, however, so it is best to get advice from a qualified professional early in the process,” Sykes said.

Another avenue for nursing home residents who’ve exhausted their ability to pay is a benevolent care fund.

Concordia Lutheran Ministries of Pittsburgh, which operates Concordia of the South Hills, 1300 Bower Hill Road, maintains a Caring Fund. According to a recent 990 filing with the IRS, “Benevolent care is a core tenet of the mission of Concordia Lutheran Ministries.”

Asbury Heights, 700 Bower Hill Road, part of UPMC Senior Communities, also offers a Benevolent Care Program to aid residents who’ve outlived their resources and can no longer pay full cost for their care.

Once you familiarize yourself with the complexities of elder care, Sykes offers this additional piece of advice: “Anticipate waiting lists. In an era of high demand and labor shortages, many clients tell me that their preferred facility has a waiting list. Start early to make sure you have a spot at your desired location when you need it,” he said.


Understanding long-term care lingo

Nursing homes, also called skilled nursing facilities, provide a wide range of health and personal care services, focusing more on medical care in a hospital-like setting.

Assisted living offers residents support for daily activities ranging from cleaning to meal preparation, medication management and bathing assistance.

Independent living, as the name implies, allows residents to live independently, with assistance available when necessary. Housekeeping, meals and laundry may or may not be included in the monthly rent.

Respite care provides short-term relief for primary caregivers. It can be arranged for just an afternoon or for several days or weeks.


Sample checklist for medical assistance application for skilled nursing:

Social Security card

Medicare card

Health insurance card

Income verification letter from Social Security

Income verification letter for pension

Checking account statements over a 5 year look-back period

Savings account statements over a 5 year look-back period

Credit union, money market and any other financial statements over a 5 year look-back period

Accounts closed within the past 5 years and proof of where assets were transferred

Savings bonds

Shares of stock

CDs, IRAs, or any other investment accounts

Deed to any real estate

Title/registration to all vehicles

Life insurance policies and a letter stating face and current cash value

Prepaid funeral or burial reserve (irrevocable), up to a max of $23,515.71

Deed to cemetery plot

Power of attorney or guardianship papers

One month of monthly bills (mortgage, rent, utilities, etc.)

Taxes (city, county, school)

Homeowner’s insurance premium