[The following guest article was written by Elizabeth White, a lawyer with Marshall, Parker and Weber in Williamsport, Pennsylvania. It is reprinted here with her permission.]
The cost of long-term care in a skilled nursing facility continues to rise each year. A one year stay at a nursing home in Pennsylvania will cost, on average, $100,000.00. Understandably, many wonder how they could afford to pay for this care if they would require a nursing home stay. The first thought that some have is that Medicare will pick up the tab for a stay in a long-term care facility. But does Medicare pay for nursing home care?
Generally, the answer is, no, Medicare does not usually pay for care at nursing facilities. There are specific circumstances in which Medicare will pay for nursing home care, or a portion of the cost of nursing home care. But Medicare will pay only if certain criteria are met and then only for a limited time. Importantly, most private (supplemental) health insurance providers do not cover the cost for extended long-term care at a nursing home either.
In order for Medicare to pay for even a limited time, the nursing home admission must generally be preceded by a qualified hospital stay of at least three days. To count as a qualified stay, a patient needs to be admitted to the hospital and not be in the hospital on “observational” or “outpatient” status. For more information on a recent law to require notification of outpatient status please see Observation Status Bill Heads to President's Desk.
Assuming there is a qualified three day hospital stay prior to admission to the nursing home, Medicare can pay for, or pay for a portion of, up to one hundred (100) days so long as the resident needs "skilled care" (like intravenous injections or physical therapy). Medicare doesn’t pay if the resident only needs long-term care or custodial care.
If all of these qualification rules are met, the first twenty days of nursing home care may be covered in full by Medicare. During days 21 – 100 a portion of the daily cost can be covered by Medicare, with a co-pay by the nursing home resident of $157.50 per day (for 2015). Supplemental insurance policies will often cover all or a share of the co-pays up to the 100 days.
In order for Medicare to continue paying during this 100 day period, it must be medically certified that skilled care is needed by for the resident. This test is met if skilled care is required for maintenance purposes to prevent or slow a decline in the resident’s condition. If it is determined that the skilled care is no longer required, Medicare will stop paying.
While Medicare can be a possible source of payment for a short-term stay in a nursing home, it is not available unless all of these various conditions are met. As a result of these limitations, Medicare covers only about 14% of nursing home residents.
Even if the resident gets their full Medicare coverage, after the maximum of 100 days, Medicare pays nothing, and the full cost of the nursing home is the resident’s responsibility. At that time, payment options include paying privately, using long-term care insurance benefits if the resident has a policy, or qualifying for Medical Assistance (Medicaid) benefits.
Although the names Medicare and Medicaid sound similar, Medicaid is a different program than Medicare. Medicaid is a joint Federal and State program that can cover payments towards the cost of long-term care at nursing homes, provided that the person seeking the benefits qualifies by meeting certain strict medical and financial criteria. Because of the enormous cost involved, most nursing home residents eventually wind up on Medicaid.
Bottom Line: While Medicare provides health insurance for medical services for most adults over the age of 65, it usually does not pay for the continued services that nursing homes provide, such as assistance with the activities of daily living of eating, bathing, dressing, and transferring. It is crucial to realize this and to determine how you would financially afford the cost of a nursing home should you ever need it. Marshall, Parker & Weber can advise you and develop a plan to help defray the costs of long-term care.