Nursing home care is generally paid through one of four ways: Medicare, private insurance, Medicaid, or private payment.
Medicare coverage for nursing home care is quite limited. Medicare only covers skilled nursing care for a limited period of time. Skilled nursing care is performed in a Skilled Nursing Facility (SNF). Federal law designates only certain facilities as SNFs. In addition, there are several criteria that you must meet to qualify for Medicare coverage of an SNF. You must:
•be a Medicare recipient,
•be hospitalized for three consecutive days,
•be admitted to the nursing home within 30 days of discharge from the hospital.
•require the services of the SNF and the treatment there must be related to your hospital stay, and
•receive approval by a Medicare Peer Review Organization (PRO) to stay in the nursing home for the reasons you have claimed.
If you meet the above criteria, then Medicare will pay all or a portion of your care for up to 100 days. During the first 20 days of care, Medicare will pay for the entire cost. From the 21st day to the 100th, you must pay a co-payment, which means you pay a portion of the cost and Medicare pays the rest. The patient co-payment for 2015 is $157.50 per day. Medicare does not cover any nursing home care after day 100 of your stay.
You may be able to obtain supplemental insurance to pay what Medicare will not pay. This type of insurance is called a Medicare Supplement or Medigap insurance policy because it covers the “gap” that Medicare does not cover. This insurance is only available if you have Medicare Part A and Part B.
You may obtain private long-term care insurance to cover the cost of nursing home care. Long-term care insurance premiums are generally lower the earlier you purchase them, and premiums can be several thousand dollars annually for elderly people. Even with high premiums, long-term care insurance can be a good value because the cost of nursing home care is typically several thousand dollars a month. When choosing a policy, carefully evaluate coverages as well as costs.
Medigap policies can be used to supplement Medicare coverage. A Medigap policy would pay a portion or all of whatever Medicare would not pay. Medigap policies usually rely on partial coverage from Medicare. Thus, a Medigap policy will not generally provide any coverage of a cost that Medicare does not cover. Before purchasing any insurance policy, evaluate the strengths and limits of the policy. Medigap offers standardized policy types from which to choose and a variety of companies offer these policies. Medigap coverage is only available from private insurance companies, not from the government.
Medicaid can pay for long-term nursing home care for people who cannot afford to pay for the care themselves. Medicaid is a form of welfare, so applicants must have very limited income and assets to qualify for the program.
If you are already receiving Medicaid coverage, whether as part of a full Medicaid coverage group or as a QMB recipient then you are automatically eligible for nursing home coverage if you qualify medically. If you are not receiving Medicaid coverage, then you can qualify by satisfying the income and asset requirements. You may meet Medicaid income requirements if your countable income is less than 300% of the maximum Supplemental Security Income (SSI) monthly amount. If you do not meet the income requirement, you may be able to spend down your income to be eligible for Medicaid. Determining your spend down amount can be complicated, so you may want to consult an attorney to help you determine if you can meet the income requirement this way.
It is important also to realize that this is an eligibility requirement only. How much you will have to actually spend on your nursing home care is determined in the post-eligibility process only after you meet the eligibility requirements.
After it is established that you meet the income requirement, your assets must be considered. Medicaid will look only to countable assets. The rules for asset determination are different for married couples than they are for single people. If you are married your spouse’s assets will be counted together with yours in the initial asset consideration. But spousal impoverishment protections designate a portion of the couple’s total assets for the community spouse (one who is remaining at home while the other spouse enters the nursing home). The maximum amount of countable assets you may have to qualify for Medicare to pay toward your nursing home expenses is $3,000 for two people if both spouses are in the nursing home, and $2,000 if a single individual (or one spouse) is in the nursing home (after the community spouse’s share is calculated and attributed to him or her). The assets that are not countable in this part of the eligibility process include your home, one car, your household furnishings, an irrevocable burial trust, and others. If your countable assets are above the limit, they must be spent down until you meet the asset requirement before Medicaid will pay toward your nursing home care.
Finally, if you meet both the asset eligibility requirement and the income eligibility requirement, then nursing home care must be medically necessary. A physician must fill out a Medicaid form that states that nursing home care is medically reasonable and necessary.
After you are admitted to the nursing home, and you obtain Medicaid coverage, you may have to contribute some of your monthly income to your care. The amount you must pay is determined in the post-eligibility process. You will be allowed to keep a very small amount of your monthly income for your personal needs, like haircuts, and your spouse and other dependents may be entitled to some of your income. Everything else will go to pay for your care, with a few exceptions in special circumstances.
If you cannot finance nursing home care in any of the ways above, then you will have to pay for the care out of your pocket by making private payments. Because nursing home care is considered necessary care, spouses may be liable for support. Relatives, including adult children, may also be liable for support.
For more information, see: 42 U.S.C. §§ 1396r, 1396r-5(f)(2)(A), 42 U.S.C. § 1382(e)(1)(B)(i) (2015); W. Va. Code § 48-29-303 (2015); 20 C.F.R. 416.414(b)(1), 42 C.F.R. §§ 409.20, 409.30-34, 409.85 (2015); West Virginia Department of Health and Human Resources, Income Maintenance Manual, §§ 11.3, 11.4, 11.4(BB)(1), 11.6(C)(1), 17.9, 17.10(A)(1), 17.10(C), 17.11, http://www.wvdhhr.org/bcf/family_assistance/policy.asp (last visited May 27, 2015) ; Joan M. Krauskopf et al., Elderlaw: Advocacy for the Aging §§ 10.47-.52, 12.5 (2nd ed. 1993).