Paying for Dementia Care in New Jersey
After a dementia diagnosis, many people and their families begin considering options for long-term care. Unfortunately, both long-term care in general and memory care in particular are costly, leading to many questions about paying for dementia care.
Some common concerns include:
- Will Medicaid cover my care or my loved one’s care?
- Do you have to “spend down” all of your assets to receive Medicaid?
- Are any of my assets exempt from the Medicaid spend-down requirement?
- Is receiving in-home care an option, and how can we pay for it?
- Will Medicaid continue paying if I want to move my family member to a different nursing home?
The answers to these questions can be complex and often depend on the patient’s particular situation. If you or a family member is struggling with concerns about how to pay for memory care, we encourage you to contact the Van Dyck Law Group for a consultation.
Our elder law and estate planning attorneys will help you explore your options, answer any questions you have, and assist you with taking the next steps after you make a decision.
Understanding the Costs of Dementia Care
Memory care is a type of specialized care for people with dementia, which includes assistance that goes beyond typical assisted living situations. For instance, someone with memory issues may require additional security to prevent them from wandering off, activities to enhance cognitive function, or an aide to assist with taking medications on time.
For this reason, memory care is often more expensive than assisted living, although it may still be less expensive than a private room in a nursing home. As of 2021, the average monthly cost for dementia care was just under $7,000 (approximately $ 6,935).
Navigating In-Home Dementia Care Costs
Many people tell us that they don’t want to enter a nursing home or prefer to remain in their own residences for as long as possible. Some also want to know if in-home care costs would be less expensive.
It depends on your situation, but the short answer is not always. In-home dementia care costs can also be challenging. Depending on the level of care needed, a home health aide with dementia training can cost between $25 and $ 40 per hour. If a family member lives with the patient and can provide care some of the time, this may be a lower expense than assisted living.
However, if the patient lives alone and requires round-the-clock care, $25-$- $40 an hour can add up quickly. In these situations, in-home care may sometimes be more expensive.
In some cases, assisted living offers a third option between in-home care and nursing home care, and the costs associated with this type of facility vary. However, some people may require more help than they can receive in an assisted living situation, so it is not right for all situations.
Choosing From the Different Types of Care
If you or your loved one is considering the pros and cons of assisted living, a nursing home, or remaining at home, it’s a good idea to obtain quotes from multiple facilities and in-home healthcare agencies. This will help you determine what the costs will be.
You should also keep in mind that as dementia progresses, you or your loved one may need higher levels of care, so you can expect costs to increase in the future.
Paying for Dementia Care
People under 65 may have private health insurance, a group plan through their employer, or retiree health coverage. These plans vary in what they will cover, with some paying all or part of long-term care expenses.
Dementia diagnoses are more common after the age of 65, when people are most likely to have Medicare for their health coverage. Medicare typically covers doctors’ bills, medications, and other therapies, as well as short-term hospital stays.
However, it doesn’t pay for nursing home care. Some healthcare services provided by the nursing home may be covered, but not the cost of room and board.
Patients who meet specific income requirements may qualify for Medicaid, which will cover the cost of nursing home care. However, the income and asset threshold for qualification is relatively low, leading many people to seek other options.
Legal Options for Paying for Memory Care in New Jersey
People who don’t initially qualify may need to “spend down” assets before they can receive Medicaid financial assistance for dementia care. Some may be eligible to apply for Medicaid under New Jersey’s Medically Needy program, provided they have substantial medical expenses.
In this situation, they need to show that they will be left with less than the income threshold after paying for care.
Spending down assets and income involves a formula based on the federal poverty level (FPL), which can change from year to year. There are also allowances for slightly higher income and assets if the person is married, especially if their spouse does not require nursing home care.
The rules are somewhat complex, and the amount of allowable income is subject to change from year to year, so we recommend reviewing your situation with a lawyer.
Assets must also be “spent down” before an individual can receive Medicaid. However, it’s essential to seek legal help in moving assets, as some ways of transferring assets can be problematic.
If you don’t use the proper methods, you might inadvertently disqualify yourself from Medicaid coverage.
What Are Exempt and Non-Exempt Assets for Medicaid?
Typically, a person’s home is an “exempt” asset if it is their primary residence, but this becomes more complicated if the person moves into a nursing home. After six months, their home is no longer considered a primary residence (unless their spouse still lives there) and becomes a non-exempt asset.
If the patient owns a car they no longer use, this asset remains exempt if a family member still uses it.
Other assets, such as additional vehicles, non-primary residences, and other valuables, are usually not exempt. There are sometimes ways to protect assets by placing them in a trust, but you will need the assistance of an experienced elder law attorney to ensure this is done correctly.
Other Requirements for Medicaid Nursing Home Coverage
In addition to financial requirements, you will need to prove that a nursing home level of care is “medically necessary.” This means you or your loved one has a physical or mental health condition that requires ongoing nursing oversight and help with at least three daily living activities (ADLS), such as:
- Bathing and hygiene
- Getting dressed
- Eating
- Other personal care tasks
Some people with dementia may be able to continue performing these tasks independently at first. However, as memory issues increase, they may have difficulties, not because of physical limitations but cognitive ones. If your family member regularly forgets to eat, shower, or perform other daily activities, they may need assistance.
When you believe a nursing home may be necessary, you or your family member will need a pre-admission clinical eligibility screening. In New Jersey, this is carried out by the Office of Community Choice Options and will involve a visit from a nurse or social worker. They will come to your or your loved one’s current residence to perform the screening.
The assessment not only determines if the patient needs a nursing home or long-term care facility, but also what type of facility and services will be appropriate. In order to qualify for the right type of assistance, you and your relative must be honest about their needs and abilities.
If a nursing home is medically necessary, you will need to choose from Medicaid facilities or those that accept Medicaid payments.
Dementia Care FAQ
What If a Nursing Home is Not Medically Necessary?
You or your loved one may still qualify for other services under New Jersey’s Managed Long-Term Services and Supports (MLTSS). This program is intended to help more people stay in their own homes or assisted living communities—options that are typically more affordable and less medically demanding than nursing homes—before transitioning to Medicaid-funded nursing home care.
If approved for Medicaid and MLTSS, you or your family member may receive financial assistance with:
- Assisted living
- In-home care, such as skilled nursing, a home health aide, or a personal care aide
- Transitioning to nursing home care when necessary
Who Is Responsible for Dementia Care Payments?
It depends on the situation. In most cases, patients are responsible for their own medical bills. However, if a person with dementia is unable to manage their own finances due to their illness, they will need to have another person serve as “power of attorney,” or POA.
If you or a family member has recently been diagnosed with dementia, we encourage you to speak with an elder law attorney about setting up a POA while you are still able to do so. If you no longer have the capacity to make decisions, it’s likely a relative will need to go to court to establish a power of attorney to manage your affairs.
The financial POA, usually a relative or close friend, is tasked with handling any bills that need to be paid, including medical or nursing home expenses. They would typically do this using the patient’s income or assets, in addition to any existing insurance coverage. Once assets are exhausted, they can apply for Medicare or Medicaid coverage (sometimes both) on the patient’s behalf.
Suppose a person is approved for long-term care services through Medicaid or Medicare. In that case, they or their POA will need to enroll in one of the state’s managed care organizations (MCOs) or PACE, the state’s all-inclusive program for elderly patients. These programs work to “manage” the patient’s memory care services and meet their needs.
Learn More About Paying for Long-Term Care and Estate Planning With Van Dyck Law Group
Understanding who pays for dementia care and how can be confusing for the person with dementia or their POA. Your family law attorney can help you learn what steps you need to take and answer any questions you have about paying for memory care or long-term care.
If you or someone close to you is navigating the complexities of legal planning following a dementia diagnosis or seeking help with estate planning, Van Dyck Law Group is here to support you.
Our experienced elder law attorneys are dedicated to helping you explore your choices, resolve any questions, and create legal documents that align with your wishes.
We recognize the emotional and practical challenges that come with a dementia diagnosis, and we’re here to offer guidance throughout the entire process. Please contact us at (609) 293-2621 to learn more.
