Nursing home care can be very expensive. Average costs in the late 1990s reached as high as $60,000.
Naturally, nursing homes will accept any resident who can pay outright, and about a third of all expenses wind up being paid for by the patient and/or their families. In many cases, contractual agreements with a variety of organizations, such as the Veterans Administration (VA), the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), HMOs and private insurance companies, help this enormously.
For most families financial issues, more than any other factor, often determine which nursing home is chosen. Thus a substantial bit of financial planning is necessary for every family, even those with nursing home insurance, since it may not cover every expense. Whatever method you choose, you must meet with the nursing home’s administration beforehand and be clear on every expense and regulation before you sign a single document.
Nursing Homes: Medicare
Payments from Medicare, the federal health insurance program for people 65 and over, are typically accepted provided the resident is under the auspices of Medicare and the facility has beds available for this program. However, Medicare generally will cover only the 20 days of approved nursing care. Some other quirks of the Medicare program:
• Medicare will make some payments for 21 to 100 days of skilled nursing car in the event the patient enters the nursing home having been discharged from a Medicare-approved facility;
• In the event the patient recovers during days 21 to 100 and does not require skilled nursing care, Medicare will stop making any payments;
• After 100 days, nursing home care is not covered by either Medicare or Medigap (a Medicare supplementary policy).
Nursing Homes: Medicaid
Payments for Medicaid, the federal-state program for low-income Americans, are typically accepted provided the resident is under the auspices of the Medicaid program and the facility has beds available. It is believed that roughly half of all nursing home care in the US is paid for by Medicaid.
In the event your personal funds will be depleted after a couple of years and you believe you will be applying for Medicaid, you can avoid the possibility of having to switch homes at that time by checking first to see if the current home accepts Medicaid. The reason not every home accepts Medicaid is simple: the amount paid by individuals is higher than what Medicaid pays. At the moment Medicaid-certified homes must meet federal regulations for care, but this may change if Congress deregulates the industry.
Medicaid eligibility is determined by each state, but it is typically bounded by one’s assets; in short the patient shouldn’t have assets totally more than around $1,000 in their own name. Since all income—such as Social Security— will go towards paying the nursing home (with the exception of a personal needs allowance, which may be as low as $30/month) many people transfer their assets to other family members before entering a nursing home in order to be eligible for Medicaid.
Spouse Impoverishment provisions
Medicare’s Spouse Impoverishment provisions permit spouses of Medicaid-supported residents to hold on to what is termed a ‘minimum of resources’. This amounts to between $1,406.25 and $2,103 per month (income) and, depending on the state, between $16,824 to $84,120.00 (other financial resources). These figures date from 2000 and tend to change annually; thus, contact your home state to learn more about their application of these provisions. You can do this by contacting the Health Care Financing Administration to determine who the state Medicaid contacts are.
Home assignment means that when people with Medicaid enter a home, the facility will be within 50 miles of their primary residence. Only one rejection is allowed.
Some people employ a strategy known as spending down: having set aside enough money to cover the costs of a nursing home for approximately one year, they go through those funds then apply for Medicaid. The added benefit is that they typically are able to enter the home of their choice.