Nursing homes can be paid for 4 ways. Out of pocket/private pay, Medicare, Medicaid,
or long-term care insurance.
Private Pay: If the individual entering the nursing home is in
a position to fund the care themselves, they are expected to do so until their money
or assets are depleted. If the spouse is not receiving Medicaid, the financial obligation
then turns to him/her. Some nursing homes only accept patients who pay out of pocket.
Medicare: Usually not used to cover long-term care such as a nursing
homes, but may be covered legally for Medicare only under specific instances.
These instances are:
- The individual is receiving skilled nursing care only as that provided by a nursing
home
- The individual has to be hospitalized for 3 or more consecutive days
- The nursing home is Medicare-approved with an on-duty registered nurse around the
clock
- The individual is only allowed to stay in a specific bed that is specially designated
by Medicare to be reimbursed
Because Medicare does not usually cover long-term care such as a nursing home, only
20 days at the nursing home will be covered. Beyond that, 80 more days possible
can be covered with the help of co-pay.
Medicaid can cover nursing home costs if the individual meets certain financial
criteria. Similar to private pay, sometimes financial resources /assets must be
used first. Each state has different criteria for determining finances, and who
may qualify. But there are some general qualifications that are followed. The individual
must:
- be 65 or older
- be blind or disabled (as per your state)
- be a legal resident of the same state in which Medicaid was applied for
- need care that can only be provided from a Medicaid-licensed nursing home with a
dedicated Medicaid bed
- meet state determined asset test
- meet state determined low income test
Long-term care insurance: This is a private insurance policy purchased
to help provide financial assistance for nursing home care. Insurance companies
must be licensed by the state in which they’re selling long-term care insurance.
Policies can differ based on what are the individual’s needs or levels of care.
The premiums on this type of insurance can be lower when bought at a healthy or
younger age. Individuals who purchase these types of insurance policies can use
them as deductions on their taxes, depending on their age.
