There are many ways you can pay for nursing home care. Most people who enter nursing homes begin by paying for their care out-of-pocket. As you use your resources (like bank accounts and stocks) over a period of time, you may eventually become eligible for Medicaid.
Medicare generally doesn't cover long-term care stays (room and board) in a nursing home. Also, nursing home care isn't covered by many types of health insurance. However, don't drop your health care coverage (including Medicare) if you're in a nursing home. Even if it doesn't cover nursing home care, you'll need health coverage for hospital care, doctor services, and medical supplies while you're in the nursing home.
There are several other ways you can pay for nursing home care:
You can use your personal money and savings to pay for nursing home care. Some insurance companies let you use your life insurance policy to pay for long-term care. Ask your insurance agent how this works.
Help from your state (Medicaid)
If you qualify for Medicaid, you may be able to get help to pay for nursing home care costs. Not all nursing homes accept Medicaid payment.
Check with the nursing home to see if it accepts people with Medicaid, and if it has a Medicaid bed available. You may be eligible for Medicaid coverage in a nursing home even if you haven't qualified for other Medicaid services in the past.
Sometimes you won't be eligible for Medicaid until you've spent some of your personal resources on medical care. You may be moved to another room in the Medicaid-certified section of the nursing home when your care is paid by Medicaid. To get more information on Medicaid eligibility requirements in your state, call your Medicaid office.
Important things to know about Medicaid
Paying for care
You may have to pay out-of-pocket for nursing home care each month. The nursing home will bill Medicaid for the rest of the amount. How much you owe depends on your income and deductions.
The state can't put a lien on your home if one of these is true:
- There's a reasonable chance you'll return home after getting nursing home care
- You have a spouse or dependents living there
This means they can't take, sell, or hold your property to recover benefits that are correctly paid for care while you're living in a nursing home in this circumstance. In most cases, after someone who gets Medicaid nursing home benefits passes away, the state must try to get whatever benefits it paid for that person back from their estate.
However, they can't recover on a lien against the person's home if it's the residence of the person's:
- Spouse, brother or sister (who has an equity interest and was residing in the home at least one year prior to the nursing home admission)
- A blind or disabled child in the family
- A child under the age of 21 in the family
Most people who are eligible for Medicaid have to reduce their assets first. There are rules about what's counted as an asset and what isn't when determining Medicaid eligibility. Also, states are required to let married couples protect a certain amount of assets and income when one spouse is in an institution (like a nursing home) and one isn't.
A spouse who isn’t in an institution may keep half of the couple’s joint assets, up to a maximum of $119,220 in 2016, as well as a monthly income allowance. For more information, call your Medicaid office. You can also call your local Area Agency on Aging to find out if your state has any legal services where you could get more information.
Transferring your assets
Transfers for less than fair market value may subject you to a penalty that Medicaid won’t pay for your nursing home care for a period of time. How long the period is depends on the value of the assets you gave away. There are limited exceptions to this, especially if you have a spouse, or a blind or disabled child. Generally, giving away your assets can result in no payment for your nursing home care, sometimes for months or even years.
Federal law protects spouses of nursing home residents from losing all of their income and assets to pay for nursing home care for their spouse. When one member of a couple enters a nursing home and applies for Medicaid, his or her eligibility is determined under "spousal impoverishment" rules.
Spousal impoverishment rules help make sure that the spouse still at home will have the money needed to pay for living expenses. These rules protect a certain amount of the couple's resources, and at least a portion of the nursing home resident's income, for the spouse who's still at home. For more information, call your Medicaid office.
Applying for Medicaid
To apply for Medicaid, call your Medicaid office. They can tell you if you qualify for things like:
- The Medicaid nursing home benefit
- Programs of All-Inclusive Care for the Elderly (PACE)
- Home and community-based waiver programs
Long-term care insurance
This type of private insurance policy can help pay for many types of long-term care, including both skilled and non-skilled care. Long-term care insurance can vary widely. Some policies may cover only nursing home care. Others may include coverage for a whole range of services, like adult day care, assisted living, medical equipment, and informal home care.
If you have long-term care insurance, check your policy or call the insurance company to find out if the care you need is covered. If you're shopping for long-term care insurance, find out which types of long-term care services and facilities the different policies cover. Also, check to see if your coverage could be limited because of a pre-existing condition. Make sure you buy from a reliable company that's licensed in your state.
Federal employees, members of the uniformed services, retirees, their spouses, and other qualified relatives may be able to buy long-term care insurance at discounted group rates. Get more information about long-term care insurance for federal employees.