Medicare/Medicaid
After one selects the proper level of care a loved one needs, the next step is determining how to pay for those services. Will it be from your savings or from something like elder care insurance (long term care insurance)? Any nursing facility you are considering should conduct an assessment to help you make this determination and to explain the individual facility's rate structure.
One should plan for long-term care the way one plans for retirement. In today's nursing facilities, forty percent of those admitted are sent home after a rehabilitating stay. But that doesn't change the fact that 24-hour medical attention, plus food, shelter, and programming offered in a nursing home, no matter how short or long the stay, is a costly proposition for the average taxpayer. Quality nursing home care costs $50,000 a year on average, and can quickly devour a person's savings. What payment sources are available for people needing long-term care services? There are five types of financial coverage for nursing home costs: Medicare, Medicaid, Private Insurance, Personal Funds and Long Term Care Insurance.
Medicare Part A
This portion of the Medicare program pays for both hospitalization and some nursing home care.
Nursing Home coverage is provided if you meet strict medical criteria, i.e. daily skilled care as well as what other criteria?
- You must be hospitalized three consecutive days (theday of discharge is not counted) within the last 30 daysprior to admission to a skilled facility.
- The physician must verify that your treatment and intensity of care meets the Medicare criteria for skilled nursing home care.
- The Medicare Utilization Review Committee must verify your need for skilled care both before and after admission.
If I meet the above criteria, what type of coverage am I eligible for?
If you meet the above criteria and are admitted to a nursing home, you may be eligible for up to 100 days of coverage available under the Medicare program. The Medicare program will pay the full cost of your first 20 days in a nursing home. The next 80 days, you will be responsible for a daily rate of $124 for the nursing care in a semiprivate room with Medicare making up the difference. This rate usually increases each year on January 1.
What services are provided under Medicare Part A?
While you are in a nursing home under Medicare Part A, the following services are covered:
- semiprivate room
- pharmaceutical/ medical supplies
- physical, occupational and speech therapies
- routine nursing care
When is Medicare coverage discontinued?
If you stop receiving skilled care or if you fail to make progress from the skilled nursing care being given, the Medicare Utilization Review Committee may discontinue your Medicare coverage in the nursing home. This is not the nursing home's decision. The decision is made by the Medicare Utilization Review Committee.
| Service | Benefit Period | Medicare Coverage | Patient Pays | |
|---|---|---|---|---|
Hospitalization:Semiprivate room and board, general nursing and miscellaneous hospital services and supplies |
First 60 days | All but $992 | $992 | |
| Days 61 thru 90 | All but $248/day | $248/day | ||
| Days 91 thru 150 (lifetime reserve days) | All but $496/day | $496/day | ||
| Day 151 and after | Zero | All costs | ||
Post-Hospital
Patient must have been in hospital 3 days, enter a Medicare-approved facility within 30 days after discharge, other requirements. |
First 20 days | 100% of approved amount | Zero | |
| Days 21 thru 100 | All but $124/day | Up to $124/day | ||
| Day 101 and after | Zero | All costs | ||
Home Health CareMedically necessary skilled care; home health aide services, supplies, etc. |
Part-time or intermittent nursing care and other services for as long as patient meets criteria for benefits. | 100% of approved amount; 80% of approved amount for durable medical equipment | Zero for services; 20% of approved amount for durablemedical equipment | |
Hospice CareFull scope of pain relief and support services available to the terminally ill |
As long as doctor certifies need | All but limited costs for outpatient drugs and inpatient respite care | Limited cost sharing for outpatient drugs and inpatient respite care | |
Medicare Part B
This portion of the Medicare program must be purchased through a deduction from your Social Security earnings. You will know the coverage is in force if the words "Medical Insurance" are typed on your Medicare card.
What services does this type of coverage pay for?
- Physician services
- Ambulance Services
- Laboratory Services
- Physical, occupational and speech therapies
What am I eligible for if I have this type of coverage?
The Medicare program under Part B pays 80% of reasonable charges for the above services. The person is responsible for 20% of the bill plus the values of the annual deductible, if not previously paid.
| Service | Benefit Period | Medicare Coverage | Patient Pays |
|---|---|---|---|
|
As medically necessary | 80% of approved amount after $131 deductible | $131 deductible and 20% of the Medicare-approved charges (plus any cost above approved charges) |
| Outpatient Hospital Services | As medically necessary | 80% of approved amount after $131 deductible | 20% of the Medicare-approved charges after deductible |
| Home Health Care | As medically necessary | All costs | Nothing |
| Immunosuppressive Drugs | As medically necessary | One year of drugs used in immunosuppressive therapy after transplant | 20% of the cost |
| Blood service | As needed | 80% of the cost after first 3 pints | First 3 pints and 20% of the cost |
| Benefits |
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| You pay | Before deductible:
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After deductible:
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| Points to ponder when considering a plan |
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| Enrollment |
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Medicaid
Eligibility is determined by resources, income and medical necessity. Medicaid assists eligible patients with the monthly cost in a nursing home for both skilled and intermediate care. The patient's monthly income minus $40 to $52 per month for personal use, is applied to the monthly cost of the nursing home. Medicaid adds to the amount the patient has as income, to reach the total amount required by the nursing home.
What resources can I have and still be eligible forMedicaid?
The resources of a person applying for Medicaid as well as their spouse are considered. The spouse who remains at home may keep a minimum monthly cash allowance of $1,650. Depending on allowable expenses this amount can increase to a maximum of $2,541 per month. The maximum cash resources cannot exceed $101,640 (2007 allowance).
How does Medicaid define resources?
Resources are defined as cash money and any other personal or real property that person or couple owns. Resources may include, but are not limited to: checking accounts, stocks & bonds, certificates of deposit, automobiles, land, burial reserves, life insurance policies, and savings accounts.
What resources are exempt and not considered in the Medicaid eligibility determination?
- $1,500 - $2,000 (for use by the nursing home resident)
- The home, if the applicant has been in a nursing home less than six months or if the home is occupied by a spouse, dependent or disabled child, or a sibling with an equity interest who has lived in it for at least a year
- One vehicle, regardless of value
- The cash surrender value of the nursing home resident's life insurance policies if the face values of all policies total $2,000 or less
- An irrevocable pre-burial contract and burial plot
- A trust established by will or someone other than the nursing home resident or spouse
- Any resource not available to the nursing home resident
When can Medicaid coverage be jeopardized?
If resources are transferred 60 months or less prior to the Medicaid eligibility application month, it is presumed that the transfer of resources was for the sole purpose of establishing Medicaid eligibility. The Department of Human Services does investigate transferred resources. If the transferred resources are found, approval for Medicaid benefits could be jeopardized.
Income
The monthly income of the person applying for Medicaid may not exceed the cost of one month in a nursing home. Income is defined as money received from statutory benefits, (social security, VA pension, Black Lung benefits, and Railroad Retirement benefits), pension plans, rental property, investments or wages for labor or services.
How do I apply for Medicaid coverage?
Contact the Kentucky Cabinet for Human Resources, Department for Social Insurance at 908 West Broadway, Louisville, KY 40203;
(502) 595-4238.
What documents are necessary when applying for Medicaid?
- Social Security Card
- Medicare Claim Card
- Health Insurance Card the amount of the premium and method of payment.
- Verification of Income a copy of your monthly check.
- Bank statementsfrom the three months preceding the present month.
- Records of Other Accounts bank record of Certificates of Deposit or other special accounts.
- Life Insurance Policies.
- Burial Policies copy of the policy and cash value.
- Birth Certificate or proof of birth.
- Other documents, if applicable marriage certificate, proof of mortgage, etc.
NOTE: Coverage in each state may vary.
Private Insurance
Some insurance plans may cover a portion of nursing home costs. Your policy will indicate the extent of your coverage or you may wish to call your insurance agent or company benefits manager to discuss details. The social worker can assist if you are uncertain about whom to contact.
Will the nursing home bill me or the insurance company?
Some nursing homes will not bill private insurance companies directly, but ask for payment from the patient. Reimbursement is provided to the patient from the insurance company.
Personal Funds/Private Pay
If you do not qualify for Medicare/Medicaid benefits, you may enter any nursing home on a private pay basis. If you intend to pay privately for nursing home care, please notify the social worker who will assist you with transfer arrangements.
Long Term Care Insurance
Long term care insurance can be purchased to cover the cost of a nursing home and occasionally home health care not covered by the Medicare program. Policies are sold individually as well as through employers. Since most nursing home patients need custodial rather than skilled care, (usually covered by Medicare), long term care insurance can be a good buy depending upon the particular policy and the age of the insured. Policies may vary by restrictions, type of care, method of payment and length of coverage, making them difficult to compare.