Methods of Payment of Nursing Home Costs

There are several methods by which a nursing home can be reimbursed for the stay of an individual, some of which are temporary and some of which are permanent. However, it is necessary to keep all of these in mind in projecting the date of eligibility.

Firstly, other than the various financial issues in obtaining a Medicaid eligibility letter, a necessary element of Medicaid eligibility is to obtain a PAS for the applicant. This is an examination by the county nurse which will be given almost immediately if a potential applicant is in a hospital. Otherwise, the family is at the mercy of the schedule of the nurses who often cover several counties. Financial eligibility without a PAS will result in eligibility being delayed until the PAS is obtained.

The methods of payment of a nursing home include Medicare (for a limited period of time), long-term care insurance and private pay.

There is a misconception that Medicare will pay for a long-term institutionalization. This is not the case. Medicare will pay for a limited stay at the nursing home if the following requirements have been met:

1. The individual has resided at a hospital for at least three days.

2. Medicare will make full payment for 20 days if an individual requires skilled nursing or rehabilitation and payment is made so long as sufficient progress is made by the applicant. Medicare will also pay for some or all of the next 80 days with a co-pay that is often covered by the individual’s Medigap insurance. The family must carefully monitor the progress of the potential applicant and the thinking of the nursing home. The nursing home often gives limited notice as to the time Medicare payment ceases. At this time, the family must make the decision as to whether the individual remains in the nursing home or returns home.

If an individual remains in a nursing home, the rules of Medicaid discussed in the various Medicaid postings become applicable.

Many nursing homes require private pay for a guaranteed period of time. Although this requirement is illegal, it is part of the Medicaid game and the family should make initial inquiry as to the policy of any given nursing home.

Also, upon the expiration of Medicare coverage, the family will be presented with a nursing home application, including the key document which is the agreement. Consulting an attorney regarding the terms of the agreement is advisable.

If an individual anticipates purchasing long-term care insurance, an expert should be consulted. The permutations of the type of policy are virtually infinite. Some of the areas that are to be addressed include care at home, increase with the C.P.I., time period for coverage (that is, set number of years or lifetime), waiting period (period before payments commence), etc. I intend to have an expert write an article for this blog discussing long-term insurance in detail.

There are basically two reasons why an individual would purchase long-term care insurance. Usually, the insurance is purchased because the individual or individuals are aware of the intricacies of Medicaid and desire to have monies to avoid such process. However, such insurance can be purchased for estate planning purposes. That is, a wealthy individual might not want a diminution of assets caused by nursing home costs and the insurance would avoid or at least ameliorate that possibility.

Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.

© April 2009, Post 68