When a family member or loved one or any older adult requires skilled nursing care, the question of payment of nursing home costs typically quickly comes up. Whether it is nursing home care in a skilled nursing facility or assisted living in an assisted living facility or anything in between, the cost per month is very high, anywhere from $5,000 per month to $14,000 and even higher. Neither health insurance nor Medicare pay for long term care. Like other forms of health care, costs continue to rise year by year.
The list of payment sources for long-term care is actually rather short: (1) residents pay private pay out of pocket (if the resident’s assets are sufficient, (2) long term care insurance can pay for some or all of the care services, or (3) Medicaid pays for the cost of long-term care. And there is a 4th category for certain individuals: for veterans, veterans’ benefits can be accessed to pay for a portion of the monthly bills; the amount of stipend per month typically has a maximum of $2,500 per month, and so does not pay for the full monthly bill. (And additionally, the Department of Veterans Affairs operates many veterans’ homes exclusively to care for veterans, with very low monthly out of pocket costs.)
If sufficient private pay or long-term care insurance is available, then the process is very straightforward (but will obviously have a great impact on the pocketbook). All types of care are fully available to the prospective resident, as well as a wide variety of choices within each level of care. Skilled nursing, assisted living, memory care, home health care, independent living all of course accept private pay.
Whether or not long-term care insurance will pay for each of these levels of care depends upon the insurance plan. Some long-term care insurance plans cover a wide variety of types of long-term care, while others only pay for the cost of long-term care in a nursing home. Many insurance pay will pay if a sufficient number of activities of daily living have been compromised; if this requirement is met, the insurance company will pay for whatever level of care is necessary to meet the applicants care needs. If you have long-term health insurance, it would pay to check the insurance program to determine exactly what care options are covered, and what steps must be taken when qualifying.
Finally, for those who financially qualify, Medicaid pays, and will fully cover nursing home costs (with the nursing home resident paying a copay or his or her monthly income, Social Security and any pension). In fact, Medicaid coverage currently accounts for 60% to 70% of all nursing home costs for Americans in need of care today. The eligibility requirements for LTC Medicaid will require low income and low assets in order to qualify. Typically the care services provided are exactly the same as those provided to private pay residents; however, in many cases, Medicaid recipients are required to reside in semi-private rooms as opposed to fully private ones. The specifics regarding eligibility under the Medicaid program for these long-term care services are covered in other blog posts and on other pages on our QMC website.
Unfortunately, the comprehensive Medicaid coverage only applies to custodial care in a long-term care facility. While Medicaid does provide programs for home health care, medical care, assisted living, etc., none of these programs provide full monthly coverage for the full cost of caregivers to assist the individual. Under these other levels of care, the Medicaid coverage will only pay for a portion of care or will provide a set monthly stipend. The state places a premium on making sure that those in need of full custodial care can be fully cared for; lower levels of care, unfortunately, often suffer due to budgetary restraints.