If a loved one needs a stay in a skilled nursing home facility, either for a short time or for life, Medicare or Medicaid may be available to pay for the care. Medicare is for the short stay and Medicaid is for the long term.
Nursing homes in our area cost between $12,000 and $18,000 per month. Very few people have long-term care insurance to pay for the care and few can afford to self-pay so most people apply for the government to pay for the care.
Medicare is a federal health insurance program for people age 65 or older and for younger people with disabilities. The general rule is if you have been in a hospital for a qualifying stay for at least three days, Medicare will pay for rehabilitation in a skilled nursing facility for up to 100 days. The purpose of the stay is to help improve your condition or maintain your current condition.
Medicare pays the full cost for the first 20 days and partially covers the second 80 days, with the patient paying a daily co-pay. A secondary health insurance provider may pay the co-pay. It is recommended to confirm coverage with health insurance providers as the rules vary.
A government booklet, “Medicare Coverage of Skilled Nursing Facility Care,” published by the Centers for Medicare & Medicaid Services, describes Medicare coverage in skilled nursing facilities and is available online.
Medicaid is a joint federal and state health insurance program for those in need, but it is also the biggest payer of nursing home costs for long-term stays. To qualify for Medicaid to pay for long-term nursing home costs, a complex set of rules determines eligibility. The requirements differ in each state. The applicant and spouse may own only a certain amount of assets and any gifts made in the past five years result in a “penalty period” when Medicaid will not pay for the care for a period of time based on the amount of the gift.
In New York, it is never too late to save assets from nursing home costs. If a married couple has too many assets to qualify for Medicaid in a nursing home, the law of spousal refusal allows the spouse at home to “refuse” to pay the nursing home, which can save substantial assets. If a single applicant for nursing home Medicaid has too many assets, the gift and loan strategy may save about half of the assets from nursing home costs, even if someone is already in a nursing home.
Community Medicaid is also available for home care but is generally part-time help and not a substitute for 24-hour skilled nursing home care.
To avoid the financial and emotional crisis of needing a nursing home in a crisis, you may plan ahead by either buying long-term care insurance or creating the Medicaid Asset Protection Trust (MAPT) that protects trust assets from nursing home costs after the assets are in the trust for five years.
Bonnie Kraham is an attorney practicing elder law estate planning with Ettinger Law Firm, 75 Crystal Run Road, Middletown. She can be reached at 845-692-8700, ext. 119, or at bkraham@trustlaw.com. This column is intended to provide general information, not legal advice.