Who Pays For Care?

Much has been written recently concerning health care costs and cut backs in government entitlement programs such as Medicare and Medicaid. What does this mean for individuals in search of a senior care facility?

Individuals are responsible for paying for their own care to the extent that they have the means to do so and are not covered by insurance. Paying with personal funds is known as private pay. Private pay, insurance and the various government programs are outlined below.

Private Pay

If an individual has assets, he or she is expected to pay with personal funds until the money and assets (other than those funds excluded by law) runs out. A spouse has a legal obligation to pay for nursing home costs unless the ill spouse qualifies for Medicaid. Children and other family members (other than the spouse) are generally not required to pay in most states, but they may choose to in some cases.

Some facilities only accept private pay patients. If a facility elects not to participate in the government reimbursement programs (Medicaid and Medicare), they may only accept private pay patients. This is a business decision made by management based on the economics of their facility. For example, if a facility has many amenities that were expensive to construct, and a state's Medicaid reimbursement policy does not allow for adequate cost recovery (i.e., their reimbursement rates are too low), a facility may be forced to only accept private pay patients to meet their budgets.

Medicare: Does it Cover the Cost of Nursing Home Care?

Medicare covers the cost of a nursing home stay only under certain circumstances. The criteria are as follows:

1. The individual requires skilled care (i.e., nursing care other than general custodial, intermediate or personal care).

2. The care is provided only after a three (or more) day hospital stay for treatment of the same illness or condition that was treated in the hospital.

3. The nursing home is a Medicare-approved skilled nursing facility with a registered nurse on duty 24-hours a day.

4. The patient is assigned to a bed that is Medicare-certified for reimbursement.

5. Only a nursing home can provide the skilled care required.

Even if these criteria are met, Medicare only covers the costs of care for up to 20 days. An additional 80 days may be provided on a co-payment basis.

For more information on Medicare benefits, visit the Medicare web site.

Medicaid: Who is Eligible?

Medicaid regulations allow nursing home care to be provided for the poor or those that become poor. Different states have different rules that define "do not have the means." Divesting assets in order to qualify for Medicaid has been a continuing problem for state administrators resulting in regulations that limit the period in which an individual may divest assets prior to entering a care facility. Rules for Medicaid eligibility vary between states. However, the primary qualifications for Medicaid to provide for long-term care in a nursing home include the following:

1. Be at least sixty-five, blind or disabled as determined by the state;

2. Be a resident of the state which would provide the Medicaid benefits;

3. Need the type of care provided by a nursing home;

4. Meet the income limitation test; and

5. Meet the assets limitation test.

You may learn more about Medicaid benefits in your state by contacting your state's Department of Health and Social Services. 

A New Financial Service Can Help Seniors Pay for Living Expenses.

A new financial service called Life Settlements allows seniors to sell an existing life insurance policy to a financial institution in exchange for an immediate lump sum cash payment.   Life Settlements have quickly become one of the fastest growing financial planning tools for seniors who have unwanted, unneeded, or unaffordable life insurance policies. 

Why sell your policy?  Unplanned illnesses, increased healthcare and assisted living expenses, rising premium costs, availability of better coverage, and changing tax laws are a few of the reasons why seniors are exploring the Life Settlement option.  In the past, life insurance was only viewed as a dormant asset with a future benefit.  Today, life insurance benefits can be used to improve a senior’s current financial security or reduce the financial burden on a senior’s family.

Life Settlement offers vary and are determined by analyzing the age & health of the insured, face value of the policy, and annual premium payments.  Below is an example of a life settlement transaction:

If you are a Senior, a Family Member of a Senior, or a Senior Care Facility interested in learning more about Life Settlements, please click here for FREE Information.