What is Crisis Planning

23 Aug 2023 · 1 min

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1:01

In this video segment, Jerry Taylor defines "crisis planning" as the process families must undertake when an older adult is about to enter a nursing home but cannot qualify for Medicaid because they have too many assets. He illustrates a typical case: a person in their 70s or early 80s suffers a hip fracture, undergoes surgery, and after a short rehabilitation stay is told they need 24‑hour care in a nursing home. Taylor points out that Medicare will cover the rehab period but does not pay for long‑term nursing home care. He then outlines the three primary ways to fund nursing home placement: (1) paying out‑of‑pocket, which averages $8,000‑$10,000 per month; (2) using long‑term care (LTC) insurance, which is held by a small percentage of seniors; and (3) qualifying for Medicaid, which requires the individual’s assets and resources to fall below specific limits. The segment sets the stage for deeper discussion of how families can navigate these payment options and the importance of early financial planning.

Chapters

What is crisis planning? In my world, crisis planning is a situation where someone is about to go into a nursing home or they're in a nursing home and they cannot qualify for Medicaid benefits because they have too many assets and too many resources. In other words, they have too much money to get government benefits. A very typical scenario would be something like this. You've got a person in their 70s, maybe early 80s. They fall and broken a hip, gone to the hospital for surgery. And then they're told upon discharge that they need to find a nursing home because they're going to need 24-hour care after they go through some rehab. So they go to maybe 30 days of rehab, and then they've got to, you know, they need a nursing home to be admitted to. And it's about this time that the family figures out that Medicare is going to pay for that rehab stay, but Medicare does not pay for nursing home care. There's 3 ways to pay for nursing home care. One is out of your pocket. $8,000 to $10,000 a month on average. Two is long-term care insurance. There's a very small percentage of the