Eligibility for Medicaid varies by state. In California the program is called Medi-Cal. If you think a loved one may need nursing home care at some point in the future, you should start gathering information as soon as possible. Learning early about the requirements will ensure that needed care will be provided quickly when you or your loved one need it the most. As more people live longer and as nursing home costs rise, the urgency to know how to deal with these issues increases with time.
A nursing home is in fact a home where skilled nursing care, rehabilitative care, medical services, personal care, and recreation is provided in a supervised and safe environment. Finding the right nursing home for a loved one can be a difficult decision. However, family involvement does not end when a loved one moves into a nursing home. Your family will need to make sure the nursing home’s staff provides the personalized, good care that your loved one deserves.
Most people know that nursing home care can be expensive. Although the average cost is more than $50,000 a year and climbing, it can vary widely depending on where you live.
According to a recent survey, nursing home costs now average about $168 a day—$61,320 a year1. That is about 10% more than two years ago. Nursing home or skilled nursing home expenses can quickly deplete a person’s retirement savings. Many people over 65 are under the false assumption that Medicare or their HMO will automatically pay for most if not all of their nursing home expenses. Other people believe that employee health insurance will pay for nursing home care. This simply is not true. Often times these people are surprised to discover they will have to pay the larger portion of these costs out of their own pockets.
About a third of nursing home residents pay all of their nursing home costs from their own funds. Extended nursing home care can deplete your loved one’s savings in as little as six months. Only about 5 percent of all people who eventually need nursing home care have purchased long-term care insurance, which covers the cost of a nursing home or other extended skilled nursing care. Medicare, the federal health insurance program for older people and some younger people with disabilities, only pays for short-term nursing home stays.
About two-thirds of all people who require nursing home care pay for their care with money from Medi-Cal, a state health insurance program for people with low incomes. Medi-Cal picks up the cost of nursing home care once people have used up almost all of their savings—spouses are allowed to keep some assets including income, savings, and their home. However, Medi-Cal will only pay for nursing home care that is provided at a facility certified by the state government.
Finally, please do not confuse Medicare with Medi-Cal. Medicare is a health insurance program and never “takes everything away” from someone who uses it. However, Medicare only pays for short-term skilled nursing care. The Medi-Cal program often pays for long-term nursing home care and may require estate recovery for repayment of this care. But, remember that the spousal impoverishment prevention program may help alleviate some of this concern for your loved one.
Medicare pays for skilled nursing home care. This is not the same as long-term nursing home care. To be eligible for skilled care, the Medicare beneficiary must meet several conditions, including having been hospitalized for at least three consecutive days for a related illness prior to being admitted into a Medicare-approved skilled nursing facility. Medicare pays for the first 20 days of approved stays in a skilled facility, but coverage is limited beyond 20 days.
Individuals who receive long-term care in a nursing home not covered by Medicare must pay the entire cost themselves whether it is from their Social Security check, pension, or savings. If individuals don’t have sufficient income or savings to pay for long-term nursing home costs, they spend down their income, savings, and other assets to help pay for their care until they are eligible for Medicaid, a Public Aid payment source.
Many consumers do not understand that Medicare and Medi-Cal provide only limited financial assistance with long-term care needs. While Medicare will cover up to 100 days of skilled nursing home care per benefit period, after 20 days beneficiaries must pay a coinsurance fee. In 2001, that coinsurance fee was about $101.50 per day1. Medicaid provides financial assistance for approximately 70% of nursing home residents, but some are required to deplete their assets before the program will pick up the bill for their care.
The cost of nursing homes, long-term care, retirement communities, assisted living facilities and other independent living facilities is extremely variable. It’s important that you research all of these costs and factor them into your retirement planning and estate planning. Attorney Judd Matsunaga of Elder Law Services of California is available for a free initial consultation to help you learn more about how you can simultaneously qualify for Medi-Cal to pay for nursing home costs, protect your family’s assets and save the family home having to be sold in the future to pay for the nursing home care received. Call Elder Law Services today at 1-800 403-6078.
1 Source: MetLife General News: Press release.