It is an unfortunate reality that incidents of neglect are higher at nursing homes which accept Medicaid as a payment provider. This situation has likely come about because Medicaid offers nursing homes lower reimbursement rates for Medicaid participants then they would otherwise charge individuals who private pay (except where prohibited by law). These institutions are put in the difficult situation where they cannot afford to be as well staffed as private pay nursing homes, therefore a higher degree of neglect occurs simply due to staffing challenges. With this in mind, we thought an examination of the sources that help pay for or actually prevent nursing placement would be of value.
Prior to doing so, it is helpful to briefly review Medicare’s policy towards paying for nursing home care. Medicare pays the complete cost of nursing home care for 20 days only. Following that they will pay for 80 days at 80% of the cost. Furthermore, this benefit is reserved for individuals deemed to require nursing home care for recovery, not for chronic, long term conditions.
Medicaid, by far, shoulders the greatest percentage of the nursing home care cost burden in the United States. For eligible individuals, Medicaid will pay the full cost of nursing home care for an indefinite period of time. The problem with Medicaid is that it is a solution intended only for those who are impoverished. The program has rigid financial eligibility guidelines, which although they vary by state, are approximately $2,000 in monthly income and $2,000 in countable assets.
Medicaid Waivers provide an alternative to residential nursing home care by providing nursing home level care to individuals in their homes or communities. Waivers, although usually preferred by families and less expensive for government, are a relatively new method of care payment and care delivery. All states offer different waivers with different benefits and all waivers have enrollment caps which limits participation. Eligibility requirements are usually similar to Medicaid.
The Veterans Administration is also a large payer of nursing home services. The VA contributes in two ways. There are VA Nursing Homes and the Aid and Attendance Benefit. VA Nursing Homes are for individuals who require nursing home care as a result of a disability sustained during their military service. The Aid and Attendance benefit is a pension benefit for war-time veterans who require assistance with their activities of daily living regardless of whether the need is service-connected or due to the natural aging process. Aid and Attendance is a cash benefit that can be applied towards the cost of nursing home care (or assisted living).
Reverse mortgages are also used to fund nursing home care, but their usefulness is limited to families in specific situations. The terms of a reverse mortgage require at least one individual on a home’s title to be living in the home. This creates an obvious challenge for single persons, who cannot simultaneously live in a nursing home and at home. However, married couples in which one spouse can live independently at home can use reverse mortgages to pay the spouse in need of care’s nursing home costs.
Finally worth mentioning is a category of state-funded, financial assistance programs that help persons who do not qualify for Medicaid, but still require nursing home level care. These programs are sometimes referred to as nursing home diversion programs as they intend to divert individuals from nursing home placement by providing home care and caregiver support services. On our website, we offer a state-by-state list of nursing home diversion programs.
Our website provides an in depth examination of the financial assistance available for nursing home care as well as searchable database of financial assistance and cost reduction tips for nursing homes, assisted living and home care.
Alex Guerrero is the Director of Operations for the American Elder Care Research Organization. The organization is dedicated to helping families find the financial means to pay for long term care and they produce the website www.PayingForSeniorCare.com.