Payment Options for Nursing Home Care
Nursing home care can be paid for through Medicare (although very limited), private pay, long-term care insurance or Medicaid (also known as Title 19). This resource discusses these payment options and, in particular, provides an overview of common Medicaid issues. Medicare, private pay and long-term care insurance. For information on Medicaid as a payment option, click here or contact the Legal Hotline for Older Iowans at 800-992-8161.
Medicare pays for very little nursing home care. Medicare covers up to 100 days of skilled nursing care in a single benefit period. Skilled care is for those who need intensive, 24 hour a day care and supervision by skilled health care providers, including registered nurses and rehabilitation specialists. In fact, skilled care sometimes is referred to as "rehab." To trigger Medicare coverage, this care must follow at least three days of in-patient hospitalization. Most care provided in nursing homes is not skilled care for Medicare purposes. After the 20th day of skilled care, patients must make a $170.50 daily co-payment. Some Medicare Supplemental policies will pay that co-payment amount. Read your policy carefully to find out. After the 100th day, Medicare will no longer pay for skilled nursing care. Because of these restrictions, Medicare is only an option for short-term nursing home care under very limited circumstances.
Long-term care is privately paid when an individual pays the entire cost of nursing home care with their own assets and income. While the cost can vary greatly, the current statewide average cost of nursing home care in Iowa is over $6,000 a month. Many people private pay until they qualify for Medicaid.
Long-Term Care Insurance.
Many people purchase long-term care (LTC) insurance to meet all or part of the cost of nursing home care. LTC insurance lets you use your income and assets for other purposes. Reasons to buy a policy include protecting resources for a spouse or other dependents, leaving an inheritance, avoiding Medicaid, and having more choice where you receive your care.
Whether you should buy LTC insurance will depend largely on how you balance the following factors:
- Risk Factors. Persons with a family history of Alzheimer's or other degenerative diseases are at higher risk of needing nursing home care. In addition, women, who make up roughly 90% of current nursing home residents, usually outlive their spouses and are at higher risk of needing nursing home care.
- Age and Health. Your age and health will influence your ability to obtain and pay for LTC insurance. The older you are and the poorer your health, the more difficult to obtain coverage at an acceptable cost.
- Availability of Others to Provide Care. If you have a spouse or other family members willing and able to provide care over an extended period of time, you are less likely to need LTC insurance.
- Income and Assets. You may wish to consult with a financial advisor about whether to purchase LTC insurance. If you have assets that produce enough income to pay for a nursing home, you may not need insurance to protect or preserve your assets. On the other hand, if you have only a small amount of assets, you will probably qualify for Medicaid in a short amount of time, and the cost of insurance may exceed the value of your assets. .
If you decide LTC insurance may be right for you, there are a number of issues to consider in choosing a specific policy. For example:
- Is the insurance company financially strong with a history of good service?
- What types of services are covered? Does it cover services in your home or an assisted living facility, adult day care, respite services?
- Will the policy pay enough for the geographic area in which you are likely to receive care?
- How much insurance do you need? You should look at the total cost of care less what you can afford to pay.
- Are benefits adjusted for inflation?
- Is a hospital stay required?
- How long do benefits last?
Compare policies of two or more companies before making a decision. You can get free advice about long-term care insurance from a Senior Health Insurance Information Program (SHIIP) counselor at 800-351-4664.
Iowa Legal Aid provides help to low-income Iowans.
To apply for help from Iowa Legal Aid:
- Call 800-532-1275.
- Iowans age 60 and over, call 800-992-8161.
- Apply online at iowalegalaid.org
If Iowa Legal Aid cannot help, look for an attorney on “Find A Lawyer” A private attorney there can talk with you for a fee of $25 for 30 minutes of legal advice.
*As you read this information, remember this article is not a substitute for legal advice.