How to Pay for Nursing Home care
||Dr. Jodee Graifman Meddy, DO, MS, LNHA|
Co-founder of SeniorSite.com.
Dr. Jodee Meddy is a nationally acclaimed Doctor, Licensed Nursing Home Administrator and an expert on Long Term / Extended Care issues and Nursing Homes.
How to Pay for Nursing Home care
Once a nursing home has been selected, the focus shifts
to paying for care. Most people eventually rely on Medicaid to cover these
The nursing home admitting office or other fiscal/financial department
should be available to discuss payment options with you. Be aware that
nursing facilities are prohibited from requiring a waiver of Medicare or
Medicaid coverage. It is also unlawful for a nursing facility to require a
third party such as yourself to guarantee payment as a condition of
Within broad national guidelines provided by the federal government, each
state establishes its own Medicaid eligibility standards, determines the
type, amount, duration and scope of services, sets the rate of payment for
services and administers its own program.
There are a variety of ways to pay for nursing home
The traditional Medicare "fee-for-service program" is generally available to
qualified individuals 65 years of age or older and those under age 65 who
have been disabled for at least 24 months.
Medicare is divided into two parts, Part A Hospital Insurance Benefits and
Part B Supplemental Medical Insurance:
Part A covers hospitalization, skilled nursing care in a skilled nursing
facility (SNF/NF), home health care and hospice care. There is automatic
enrollment for Part A.
There are deductible and co-payments for hospital and nursing home care.
To qualify for skilled nursing care in a SNF/NF, the following five
requirements must be met:
1. The resident requires daily skilled nursing or rehabilitation services
that can be provided only in a SNF/NF.
2. The resident was hospitalized for at least three consecutive days, not
counting the day of discharge, before entering the SNF/NF.
3. The resident was admitted to the facility within 30 days after leaving
4. The resident is admitted to the facility to receive treatment for the
same condition or conditions for which he or she was treated in the
5. A medical professional certifies that the resident requires skilled
nursing care on a "daily basis." A Resident requires skilled nursing or
skilled rehabilitation services on a daily basis when services are medically
necessary and provided seven days a week. There is an exception if they are
only provided by the facility for five days per week due to staffing levels
at the facility. Additionally, there may be a one- to two-day break if the
resident's needs require suspension of the services.
Where these five criteria are met, Medicare may provide coverage of up to
100 days of care in a SNF/NF. The first 20 days of covered services are
fully paid for; and the next 80 days (days 21 through 100) of the covered
services are paid for by Medicare subject to a daily coinsurance amount for
which the resident is responsible. The Medicare Part A co-insurance amount
for 2003 is currently $105 per day.
With limited exceptions, a resident who requires more than 100 days of SNF/NF
care in a benefit period will be responsible for private payment of all
charges beginning with the 101st day.
A new benefit period may begin when the resident has either not been in a
facility or has not been receiving a covered level of care in a SNF/NF for
at least 60 days, returns to the hospital for another three-day stay, and
then re-enters the SNF/NF.
Part B Supplemental Medical Insurance covers physician services, ambulance,
durable medical equipment, screening for pap smear, screening mammography,
X-rays, out-patient care and prescriptions (very limited). Part B is
voluntary and requires a monthly premium payment of $58.
Medicare payment for the above services is based on Medicare's "reasonable
charge" standard rather than the actual bill.
The resident in a SNF/NF is responsible for private payment of therapy
charges and any other ancillary charges above the Medicare Part B coverage
The Facility can bill and receive payment if the resident fills out a
Medicare assignment of benefits form. If the resident completes an
assignment of benefits form, a health care provider cannot charge the
resident above the Medicare approved charge.
Contact the Social Security Administration to determine the Resident's Part
Managed Care Medicare HMO
This insurance is supposed to provide the same benefits as the Medicare
fee-for-service program, but many people find out that this is not the case.
Enrollees are limited as to which facilities are providers in their HMO, as
well as the types of coverage. The HMO will require reports on the residents
progress on a regular basis to determine the residents need for continued
This is a joint federal and state program designed to cover the cost of
certain medical expenses incurred by individuals with limited resources and
to pay for the cost of their nursing home stay. Individuals who are age 65
or older), certified blind or certified disabled are eligible for this
program. Please be aware that there are income and resource limitations.
Individuals are eligible for Medicaid:
If they receive Supplemental Security Income
If they are determined to be "medically needy"
If their income is below a state-designated cap
When a nursing home resident is married and his/her
spouse resides in the community, certain action may be taken to
accelerate the Medicaid eligibility of the nursing home resident by
protecting assets for the spouse at home at the time of the initial
eligibility determination of the nursing home resident.
In a spousal situation before an institutionalized
person's monthly income is used to pay for the cost of institutional care, a
minimum monthly maintenance needs allowance must be established to bring the
income of the community spouse up to a moderate level. This means there may
be instances where the community spouse is permitted to keep his/her income
as well as the income of the institutionalized spouse.
Check your state's eligibility requirements.
Individuals who are not eligible for Medicare or Medicaid or those who have
exhausted their benefits, and who have no insurance or other sources of
payment, will be responsible for paying the costs of nursing home care.
Daily nursing home rates should be posted in a common area of the facility.
Residents who are members of a managed care benefit plan that is under a
contract with a facility to provide specified services to plan members will
receive those services with full coverage so long as the resident meets the
eligibility requirements of the managed care benefit plan. The resident is
then financially responsible only for those services that are not included
in the list of covered services, co-payments and deductibles. Residents who
have not received a list of covered services and eligibility requirements
from their managed care benefit plan are advised to contact their social
worker and/or managed care benefit plan.
Medigap is supplemental health insurance which will provide payment for
Medicare deductibles and co-payments. There are numerous insurance companies
which sell these policies. The plans range from Plan A through Plan J and
vary in terms of coverage.
See New York's Medigap Insurance page (
www.hiicap.state.ny.us/mgap ) for more
information on Medigap, and the federal government's Medicare Personal Plan
Finder ( www.medicare.gov/MPPF/Home.asp ) to search for available plans.
Residents who are covered by a private insurance plan that does not have a
contract with the facility must exhaust all available insurance coverage
before seeking Medicare or Medicaid coverage. If the insurance proceeds
under the private plan are insufficient to cover the cost of care, the
resident will be responsible for any difference. The coverage requirements
for nursing home care vary depending on the terms of the insurance policy.
Questions regarding private insurance coverage should be directed to the
social work staff and/or the resident's insurance carrier or agent.
Long Term Care Insurance
These policies are purchased to cover the cost of nursing home care and/or
home care services. There are many different features that require careful
review before purchasing.
Veterans Administration (VA) or Other Government Insurance Exclusive of
The Department of Veterans Affairs contracts with community facilities to
care for VA patients. A rate is usually established annually and provides
for a small percentage above the facility's Medicaid rate. The VA rate,
however, is generally all inclusive, and the facility may not be able to
bill another source, such as Medicare B, for physician services, lab, x-ray,
therapies, etc. As with managed care contracts, the facility must be sure
that the agreed-upon rate covers the cost. Additionally, most contracts
cover the veteran for six months for service-related conditions and three
months for non-service related issues. The facility must be sure to make
provisions for another payer source when the benefits for the veteran end.