Mary’s Dilemma – Don’t Let it Be Yours

Mary called me in desperation.  Her husband Bob had recently been hospitalized with heart problems.  He is also struggling with the onset of Alzheimer’s Disease.  Mary has been able to administer care to this point but it has taken its toll on her physically and mentally and her children are concerned about her health.  Mary made a commitment to keep Bob at home.  With the encouragement of her kids she called to inquire about benefits available to help pay for in home care which she expected to be nearly round the clock.

 Bob and Mary’s combined income is about $2500 per month from Social Security and a pension.  While they own their own home worth about $400,000, their savings are down to $50,000.  There is no way Mary can afford the cost of Bob’s care, maintaining the home and still have something left to support herself.  They have no long term care insurance policies.  Mary figured there must be a government benefit program to help her.  Sad to say there isn’t one that fits her needs and desires.

 First I asked if Bob was a veteran.  He was, having served during the years between the Korean and Vietnam wars.  “Unfortunately”, I told Mary, “Bob cannot qualify for the $1949 per month of additional income VA Aid and Attendance benefits could provide because he was not a “wartime veteran”.  Even if he could qualify, however, the VA pension is likely to be a mere drop in the bucket and would not solve Mary’s monthly income/expense deficit.

 We then discussed Medicaid.  I explained to her that in New Jersey the home based Medicaid program only covers about 40 hours per week and that is after Mary spends their assets down, in her case to approximately $20,000.  Not very much help if you consider that Mary would have to pay for the rest of care out of her own pocket.  She could take a reverse mortgage and tap into her home equity, but what would she be left with? 

 That’s a real concern because Mary could outlive Bob by 5 or 10 year or more.  She’ll need every dollar of their assets to live in since she’ll lose some of their income when he dies, one Social Security check plus his pension.  This is Mary’s dilemma.  Put Bob in a nursing home and Medicaid will pay for his care there but that’s not what she wants.  Keep him home, on the other hand, and she’ll deplete their remaining assets leaving her without enough for her own care down the road.

 How did Mary end up in this predicament and what could she have done to avoid it?  There are a number of things that Mary and Bob could have done to plan for the possibility of needing long term care.  But, they should have taken those steps when they were both healthy.  A combination of insurance, elder planning with an elder law attorney and realistic spending with an eye towards the future would have put them in a much better position to handle the crisis they now faced and given Mary much more appealing choices.  Too late for this couple but not for future Marys and Bobs in coming years.