How to Pay For Nursing Facility Care
Medicare is a federal health insurance program for people over 65 and certain disabled people under 65. It is not a long term care program. Rather, Medicare covers only those nursing facility services rendered to help a beneficiary recover from an acute illness or injury. Medicare is administered by the federal government's Center for Medicare and Medicaid and is divided into two parts: Hospital Insurance (Part A) and Medical Insurance (Part B). Payments are made to providers through private insurance companies with which the government contracts or through HMOs who have risk contracts with Medicare. Eligibility--Nursing facility coverage falls under "Part A" of Medicare and is very limited. Medicare pays up to a total of 100 days of care in a skilled nursing facility (SNF). Medicare will cover 100 percent of the first 20 days in a SNF; for days 21-100, the individual must make a daily coinsurance payment.
Medicare pays for nursing facility care only under the following conditions:
Benefits -- If all of the above conditions are met, Medicare pays for the cost of care during the first 20 days of care in a SNF. For the 21st through the 100th days, the patient must share the cost of care by paying a daily coinsurance rate, or a Medicare supplement can pay it. For 2006, the coinsurance amount is $119.00 (this changes annually).
Covered services under Medicare include:
Medicare does not cover:
Medicare Part B may help pay for covered services you receive from your doctor in a SNF, if you choose to participate in the Part B medical insurance program. If you have used up your Part A coverage for a spell of illness, Part B also covers a portion of services received in a SNF, such as physical and occupational therapy. Under the Part B program, you must pay an annual premium and a deductible for all Part B services including physician services, after which Medicare pays 80 percent of the reasonable charges for covered services.
Some services that are not included under Part B are:
How to Apply for Medicare -- Contact your nearest Social Security office to find out if you are automatically covered for Part A because of credits for number of quarters worked in your lifetime. Also, if you are interested in signing up for Medicare medical insurance (Part B), the Social Security office can assist you with that process as well. Keep in mind, though, that you can only sign up for the insurance in the first three months of the calendar year.
Medicaid is a cooperative federal-state program designed to provide assistance to low-income people. It has become the major funding source for long term care. Medicaid is administered by the states under broad federal guidelines. Reimbursement rates per day of care are also set by the states.
Eligibility -- Medicaid will pay for nursing facility care to those who meet a state-determined poverty level, provided the nursing facility is "certified," meaning it meets a stringent set of government standards.
Benefits -- Medicaid will pay for care in a nursing facility (NF). The amount paid is determined by the State of Texas and covers room, board, and nursing care. Medicaid will determine the amount to be paid by the resident/responsible party.
How to Apply for Medicaid -- Contact your local Texas Department of Human Services for an application. Because Medicaid is based on financial need, you will be asked for information such as residence, family composition, income, real and personal property, and medical expenses. You will also need to be sure that the nursing facility which will be receiving payment is Medicaid "certified."
Risk of Impoverishment -- Spouses of nursing facility residents are protected from what is termed "spousal impoverishment." This refers to the required depletion of an "at-home" spouse's financial resources so that the spouse in a nursing home can qualify for Medicaid.
Beginning September 30, 1989, states were required to permit the at-home spouse to retain a "maintenance needs allowance" from the other spouse's income sufficient to bring the at-home spouse's income to 150 percent of the federal poverty level for a two-person household.
Because many Americans fail to plan for their long term care needs, tens of thousands of Americans are impoverished each year by the costs of long term care. Recently enacted health insurance legislation has helped make private long term care insurance a more viable option to paying for long term care costs while preserving personal savings.
The Health Insurance Reform Act includes consumer protections for purchasers of long term care insurance and tax clarifications for long term care insurance which make treatment of private long term care insurance identical to that of health insurance coverage. Starting January 1, 1997, individuals have been able to include out-of-pocket expenses for long term care and long term care insurance premiums with their other itemized medical expenses on their annual tax returns. Long term care and other medical expenses are deductible, provided that they exceed the federal government's 7.5 percent threshold of adjusted gross income. Also, the insurance benefits consumers receive, for the most part, will not be taxable as income.
Supplemental Security Income (SSI)
SSI is a monthly cash payment from the government for eligible individuals in financial need who are aged 65 or older or persons who are blind or have a disability (including children). Typically, a person eligible for SSI payments has little or no income, total assets of less than a few thousand dollars (within certain limits set out in regulations, not including a home used for self support, automobile, values of household goods, personal effects, and life insurance), has U.S. citizenship or qualified alien status, and U.S. residency.
In certain circumstances, the SSI payment may be used towards some housing and care needs of the individual.
The SSI program is run by the Social Security Administration (www.ssa.gov), but the SSI is not the same as Social Security. Money for SSI payments comes from the general fund of the U.S. Treasury, and some states add money to the federal payment.
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