Medicare and Nursing Homes

Nursing home care is a growing problem in the United States. Seniors are living longer and longer and neither the government nor traditional pension plans have properly prepared to take care of the onslaught of baby boomer retirees that are being introduced into the system. Moreover, nursing home care is very expensive, ranging from $3,0000 - $6,000 a month. Very few retirees can afford to pay for the care by themselves.

An additional problem is that many American households require two workers to make ends meet. Tired and overstressed working families have neither the ability nor the inclination to take care of aging parents. So what is a retiree in need of care suppose to do?

The short answer is that if you need nursing home care now and you have not properly planned for it by buying long-term care insurance, you have very few alternatives. This is a harsh reality and many publications- especially those produced by government agencies will try to sugarcoat the situation. It's brutal but here are your alternatives:

  • Medicare will not pay for nursing home care unless you are in need of a Skilled Nursing Facility (SNF). If you have Medicare A and B and a doctor has authorized care and you have spent at least three full days and nights in a hospital prior to being admitted to the Skilled Nursing Facility, Medicare will pay for the lion's share of the bills for a limited time. After this time you will need to return home. Medically necessary care will continue to be provided and this can include occupational therapy and other things like durable medical equipment that will make it easier for you to live at home. Medicare will not pay for a personal aide; help with daily needs or basic living care.
  • Provided you are very poor you may be able to get help through your state using Medicaid. Medicaid coverage depends on the state you live in. People with few resources generally can get nursing home care through the state. Assets of any kind will be used to pay for nursing home care before public services take over.
  • Seniors enrolled in Medicare may be eligible for the PACE program. PACE is not offered in every state. PACE is a program designed for seniors who are 55 years of age or older. The purpose of the program is to provide care, services and support to seniors so that they are able to remain living at home rather than in a nursing home environment. PACE covers prescription drugs, doctor visits, transportation, home care and check-ups.
  • The Community Living Assistance Services and Supports (CLASS) Program is a new national insurance program that is just starting. Similar in many ways to PACE, CLASS will be available to adults who pay into the program for at least five years. After this time the program will help with some of the costs of long-term care.
  • Long-term care insurance is provided by private companies and it is specifically designed to help pay for custodial care in a nursing facility. The sooner an individual signs up for long-term care insurance the better the rates.
  • Life Insurance with a long-term care rider. This is similar to long-term care insurance but it is built into an insurance policy to provide a way to take care of nursing home care and leave money to heirs tax-free.
  • Annuities with a long-term care rider. Similar in structure to life insurance with a long-term care rider, for some people an annuity is a better choice.