What Happens When Medicare Stops Paying for Nursing Home Care?
It is common for nursing homes to be quite costly. Nursing homes also require the help of Medicare, an insurance cover. However, there is a limit to what the federal insurance program covers when it comes to nursing home care. In situations where nursing home services no longer get covered by Medicare, what measures can be taken? It can sometimes be difficult to understand how to receive proper care without incurring huge debts.
In this post, we will cover when it is appropriate to switch off Medicare, other sources that can help in the facilitation of care, and planning for the switch.
So, let’s go.
Medicare and Nursing Home Care in Summary
Seniors and some people with disabilities make up the population that Medicare caters for. There are, however, certain care types that cannot be accessed, or rather included under this cover, and that is long nursing home stays. Long-term nursing home care is usually not covered because Medicare does not encourage or promote long-term care. Now, let’s see what provisions Medicare has for nursing home care.
Medicare Offers Affordable Long-Term Care in Skilled Nursing Facilities (SNF)
Part A of the Medicare insurance plan will pay out for nursing home stays, but only for limited services and for a limited period. This is the case where an individual is required to be in a Skilled Nursing Facility (SNF) after spending thrice the time in a hospital bed. Such services include medical attention administered by specialized doctors or trained personnel such as nurses or therapists. Custodial care which deals with aid in the accomplishment of basic daily tasks, like dressing up, eating, or sitting for a shower, is, however, not included here.
Here’s a basic outline of the Medicare payment for nursing home care in a Skilled Facility Nursing:
- First 20 days – The complete payment is undertaken by Medicare.
- Days 21 – Days 100 – Most of the payments are undertaken by Medicare however some co-payments are included. The co-payment charge for the year 2024 is $200 daily.
- Day 101 and beyond – No further payments are paid by Medicare to the patient.
This implies that if the patient requires more than 100 days of care, alternative sustenance methods or means should be utilized.
Medicare Discontinuation of Nursing Homes Coverage, What Next?
Once the 100 days of Medicare benefit coverage payments are over, patients and families have to look for additional financial ways to pay for other options. Quite a few people are shocked to find out that nursing hospitals do not fall under the cover of long-term care. This is what could happen when that period has come to an end.
1. Family Uses Their Personal Money or Savings Accounts
In many cases, the patient’s families resort to personal savings as the main means of addressing their medical financing needs if Medicare payments are no longer applicable. The high costs of nursing home care, for example, often result in families having to tear through their retirement funds, savings, or other assets. Owing to the 2023 Genworth Cost of Care Survey, the average monthly rate for care inside nursing home facilities within the United States stands at over $9,000.
At this rate, the savings of many families can get drained quickly. A nursing home stay of one year could, for example, amount to about 108,000, and due to this figure, many people lose their savings unpredictably fast.
2. Long-Term Care Insurance
Long-term insurance can be helpful in meeting the costs of being in a nursing home when Medicare has stopped providing coverage. The purpose of this policy is to pay for the cost of staying in a nursing home or other long-term care such as home health care. In such cases, not everyone has long-term insurance coverage, as it is expensive and most people do not think about it until they are already elderly.
In case you have some thoughts about considering taking long-term care insurance, it is advisable to do that earlier in life or as soon as you are eligible to do so. This is because the time you take it when younger and healthy lowers your premiums.
3. Medicaid Coverage
All at once, once a person’s savings have run dry, they may qualify for Medicaid. This is a federal and state-funded program that is run by both the Federal Government and the State Government and helps an individual who has half the income of others, on healthcare expenditures. This one is different now: Medicare does not provide coverage for long-term sustaining care in nursing homes, and very specific restrictions apply regarding the beneficiary’s income and assets.
Medicaid applicants must “spend down” their assets. This implies that they need to liquidate nearly all of their reserves and convert their properties into cash. For individuals without any partners, they are typically limited to having around $2,000 in assets, although this amount differs across states. But even married couples may be able to preserve more assets than single persons, though they still have to abide by the rigid caps.
Needless to say, applying for Medicaid is often not an easy process, and it requires looking through a lot of documents and applying more than words. So it is not rare for some families with elder members to hire a lawyer who is an expert in elder law to assist them throughout this intricate process and in trying to safeguard as many assets as possible.
4. Veterans Benefits
In this case, a patient who is a veteran may have an alternative. He may be eligible for nursing home care offered by the Department of Veterans Affairs (VA). According to the VA, veterans may qualify for long-term care support based on such aspects as their income, type of disability, and certain service histories.
There are Community Living Centers for Veterans that the VA operates, or the VA may contract for care in nursing homes. Although in general there is a shortage of facilities, veterans may have to fulfill specific conditions in terms of length of service to be eligible.
5. State Programs and Assistance
Some specific states extend other programs to cater to the cost of nursing homes. These programs may differ from state to state depending on income or other provisions. It would be good to check with the Department of Health or Aging in one’s state if any programs can bear some of the costs.
Planning for the Future: What Can You Do?
In most cases, being able to afford nursing home care without Medicare coming in can be quite challenging. However, with proper planning, families as well as elderly individuals can better face this financial hurdle. Below are some measures to take:
1. Research Long-Term Care Insurance
As indicated previously, long-term care insurance covers a portion of the costs associated with nursing home care. Policies are not uniform, and, premiums, as well as coverage, are different. Ensure you start this process early as insurance for this cover becomes much more expensive with age.
2. Conform To The Rules Of Medicaid
If you or an elder family member wishes to be placed in a nursing home one day, it would be useful to know how Medicaid is operated and what the upper asset limits are. Some strategies involve asset protection to qualify for Medicaid through careful planning. Such strategies are: creating a trust, gifting assets to the family, or spending down assets on the home repair which ordinarily would be considered exempt. Ensure that an elder law attorney assists you with the process.
3. Make Savings
One more preparation strategy for long-term care for the family is to make savings. Perhaps it may not be feasible to pay the entire amount for nursing care in a nursing home outright, however, increased savings could bridge the difference between the amounts Medicaid or Insurance covers as well as the actual amount needed.
4. Look For Alternatives To This Living Arrangement
Not everyone is cut out for nursing homes. In certain scenarios, assisted living facilities, or in-home health care can suffice and prove to be cheaper as well. Some home health aides can also be reimbursed by Medicare if the qualifiers are met. Further, for most family members who do not require full-time nursing care, there are adult daycare centers and respite care services that provide periodic care.
Conclusion
Medicare covers only a qualifying period of nursing home care so one has to put in place measures not to encounter problems financially.
Care can be paid for by using savings, long-term care insurance, Medicaid, or benefits for veterans.
It is advisable to start planning. This way, you will be able to look for the most affordable ways to care for your family member.
Understanding the strategy that Medicare has limits and that you will need to plan is ideal, it will help reduce stress.
