“To pay for nursing home costs beyond 100 or 190 days, many people turn to Medicaid, veterans benefits, relocation to a less expensive part of the country, long-term care insurance or reverse mortgages.”
You cannot count on Medicare paying for much, if you need nursing home care. Medicare can pay for skilled nursing care for a short period of time, but not for ongoing residential services. Medicare will also not pay for a nursing home admission for a chronic or long-term condition for which there is no cure. It will pay for you to recuperate (convalesce) briefly from an illness or injury. As you strategize for your financial future, you need to answer the question, How can I plan for nursing home costs?
Medicare will pick up the tab for 100% of the first 20 days and 80% for the next 80 days. If you have Medicare Supplement insurance, it will pay the other 20% for days 21 through 100. Neither Medicare nor Medicaid Supplement insurance will pay anything after 100 days, unless you are in a psychiatric hospital that is also a nursing home and you are there for a psychiatric condition. In that situation, Medicare will help pay up to 190 days.
Options to Pay for Nursing Home Care
To pay for nursing home costs beyond 100 or 190 days, many people turn to Medicaid, veterans’ benefits, relocation to a less expensive part of the country, long-term care insurance or reverse mortgages. You should consider different factors for each of these options.
Medicaid pays for more nursing home costs than any other agency or organization – around half of the total nursing home costs in America. Not everyone can meet the stringent financial requirements to qualify for Medicaid. You must be low income and have few assets to be eligible. Medicaid excludes many common assets, like your home, from counting toward the asset limit. There are ways to shift your income and protect your assets through estate planning products like trusts, but you should talk with an elder law attorney to find out your best options.
If you are a veteran or the spouse of a veteran, you may qualify to live in a state Veterans Administration (VA) nursing home. Every state and each nursing home has different rules for eligibility, so you will have to do your homework to find one that meets your needs and that is available for you. If you receive Aid and Attendance benefits from the VA, you cannot also live in a state VA nursing home.
Although it can be difficult to uproot yourself if your medical condition requires nursing home care, where you live can make a tremendous difference in the cost of nursing home care. The average cost of nursing home varies from a low of $147 a day in Oklahoma to $364 a day in New York to a stunning $800 a day in Alaska. The national average is $235 a day. With this variation in the expense, relocation can make your dollars go further.
Long-term care insurance is expensive, and as you get older, the premiums continue to rise. You are trusting that the company will still be in business decades down the road when you need them. At least one major long-term care insurance company liquidated in 2017 under court order. If you never need long-term care, you will get no benefit from all those premiums you paid.
Reverse mortgages and other financial products can offer more flexibility than long-term care insurance at a lower cost, but these products can also have downsides. Planning for nursing home care costs requires the consideration of multiple factors. The laws are different in every state, so you should talk with an elder law attorney in your area to decide on the best plan for you.
Paying for Senior Care. “How to Pay for Nursing Home Care.” (accessed December 5, 2017) https://www.payingforseniorcare.com/longtermcare/paying-for-nursing-homes.html