Who pays for nursing home care?Posted: Updated:
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(provided by Dick & Karen Sayre, Sayre & Sayre, p.s.)
When a spouse or parent goes to a nursing home the first question asked is "who is going to pay for my stay". The answer depends upon a number of factors. It depends on whether hospital stay occurs before going to the nursing home. It depends on how long the nursing home stay lasts. It could also depend on what assets are owned and whether the ill person has long term care insurance.
Most seniors have major medical insurance under Medicare and a Medicare supplement. This may be sufficient if the nursing home stay is preceded by a hospital admission which lasts three days or more. If the patient transfers directly from the hospital to the nursing home and the doctor has prescribed some form of therapy, coverage under Medicare may continue for a period of time. The number of days of coverage may be directly related to the length of the therapy received. Medicare will cover all costs for the first 20 days. After that time, if therapy continues, there is a daily co-payment. Normally, a portion of this will be paid by a Medicare supplement policy. If there is no supplement, the patient will be expected to pay personally for the care. When therapy stops, Medicare stops and when Medicare stops, any Medicare supplement policy stops. Few people realize the very finite limits of Medicare in paying for long term care.
When a patient has been decertified for Medicare and coverage under that program stops, a number of possibilities exist. Is the patient going home; are they staying at the nursing home and paying privately; do they have long term care insurance to cover their stay; or is the patient Medicaid qualified? The Department of Social and Health Services (DSHS) estimates the average cost of a nursing home in the State of Washington is $206.00 per day. That number is updated every year by the DSHS in October. Most skilled nursing facilities in Spokane charge more than this amount. It's a big number and goes up faster than most other parts of our economy. It should be a concern to all of us as we age.
As a result of the cost of nursing home care, long term care insurance becomes far more critical than ever before. Only policies issued after 1989 in Washington State automatically provide "custodial care" however, and policies issued prior to 1989, or issued outside Washington (regardless of the date) likely need to be canceled in favor of the newer policy form. Older or out of state policies often omit custodial care, or provide inadequate benefits. Some older policies do not cover dementia care adequately. It is therefore critical that your attorney or insurance professional review your coverage. If long term care insurance make sense for you, it could wind up being a very good investment.
In addition, some long term care policies now include a return of principal by use of a term insurance component, and many life insurance policies permit you to draw against death benefit value to pay nursing home costs (generally, the amount of the draw is a percentage of the death benefit). A policy such as this may be an alternative for someone who does not want to purchase a nursing home policy, and prefers to "self insure" against disability. Your insurance agent can provide you with more information concerning this product. Note that it is not a Long Term Care policy, so care must be taken to insure that the benefits you desire are included in the plan.
Finally, as part of the Deficit Reduction Act of 2005, states are to give a "credit" for the value of a qualified long term care policy, which should increase the amount of resources you may retain when you apply for Medicaid. This was originally included in federal legislation a long time ago, but was never enacted in Washington. At this time, Washington has not adopted regulations to implement this change, but if it does, this could provide additional help to those who purchased long term care insurance when medical needs outstrip their ability to pay.
If you do not have adequate resources or long term care insurance, you may be able to qualify for Medicaid. You should refer to other parts of this web-site related to Medicaid qualification and gifting for more information on eligibility requirements.
(Sayre and Sayre is a Spokane-based law firm specializing in Elder Law issues)
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