Who Pays for a Nursing Home?
And you thought college tuition was a budget breaker! How about $45,000 a year for the average nursing home stay? No low-interest student loans or scholarships here. So what's a typical, middle-income family to do? If your parents were fortunate enough and well-off enough to have purchased long-term care insurance then the financial hit will be minimal. But if they don't have it, which accounts for 98 percent of us, here's what you should know.
Under very limited conditions Medicare will pay for some nursing home care costs for those who require skilled nursing or rehabilitation services. Here's a shocker: Medicare pays for less than 10 percent of all nursing home bills! Most people think Uncle Sam picks up the tab. Wrong.
If you are fortunate enough to have some of the bill paid by Medicare, then you've got to make sure that your parent goes to a home that is certified by Medicare. Not all are, so make sure you ask. Here are the five conditions your parent must meet before Medicare will pay for any care:
- Skilled care is required every day as an inpatient.
- Your parent has been in the hospital for three consecutive days, not including the day of discharge.
- Admission to the nursing home is made within 30 days of the hospitalization.
- Admission to the nursing home is for the same condition as was the hospitalization.
- A physician must certify the need for skilled nursing or rehabilitative care.
If your parent meets all of these conditions Medicare may pay up to the first 100 days of your parent's nursing home stay. Even then, after the first 20 days Medicare will pay 80 percent of the bill, so hopefully your parents have a Medi-gap policy to pick up the other 20 percent. After the 100 days, you're on your own. Please pay attention to the words—limited, some, and may—there aren't any guarantees. Be sure to ask the hospital social worker to explain the conditions and terms to you.
Bottom line? Don't count on Medicare to pay your parent's nursing home bill!
Medicaid programs are run by the state, usually the department of public welfare or human services. Medicaid pays the nursing home costs for people who have a low income and limited assets. Today, Medicaid pays for seven out of 10 residents—it's why state welfare budgets are hemorrhaging.
Most people start out paying for nursing home care through their own savings and spend down to a point where they qualify for Medicaid. Every state has different rules for qualifying, so you should contact your local area agency on aging or welfare office to find out your state's eligibility requirements.
State Health Insurance Assistance Program (SHIP) offers trained volunteers who can help you sort through your parents' insurance issues, such as figuring out what coverage they currently have, whether or not they qualify for other government programs, or if they have policies that duplicate each other. They can't recommend a specific policy but can answer many of your questions about how to pay for nursing home care. You can find SHIP's number in the blue pages of your phone book or call your local area agency on aging. You can call Medicare directly at 1-800-633-4227.
Some people think that you have to spend yourself down to poverty to qualify which means the spouse will lose his or her home and spend the rest of his or her life in poverty. But federal laws protect enough of your parent's assets so that the one living at home isn't forced into poverty.
There are lawyers who will show you how to qualify for Medicaid even if you have a high income. There are a number of steps you can take to protect your assets several years in advance of your parent needing nursing home care. Even though this may be legally correct, the ethics are very questionable. States will look back over a period of three to five years to see if you have transferred assets to intentionally misuse Medicaid. These state and federal funds are reserved for those who truly need the financial help. Gaming the system hurts us all in the long run. Rule of thumb: If somebody can afford to hire a lawyer to rework his or her finances to exploit Medicaid, that person can afford to take care of his or her parents without putting them on welfare.
More on: Aging Parents
Excerpted from The Complete Idiot's Guide to Caring for Aging Parents © 2001 by Linda Colvin Rhodes, Ed.D. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.
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