Paying for nursing home care
Nursing homes provide facilities which enable patients with injuries, acute illnesses or postoperative care to receive medical attention in an environment outside a hospital. More than 90 percent of nursing home residents are over the age of 65. More than half of these residents are age 85 are older. Persons over 65 years of age have about a 43 percent chance of eventually spending some time in a nursing home before they die. Nursing homes are to be distinguished from Assisted Living facilities, which provide care and residency for persons with less severe medical needs or disabilities.
Nursing home care is expensive. The average cost of Idaho nursing home care exceeds $5,000 per month. The following are the most common sources for paying for nursing home care.
• Medicare
Medicare, which is available to persons age 65 or older, only covers up to 100 days of nursing home care and only if following hospitalization.
• Long-Term Care Insurance
Conventional health insurance does not pay for long-term nursing home care. Therefore, a relatively small percentage of Americans have applied for and obtained private insurance to pay for any eventual need for a stay in a nursing home. The monthly premiums for such insurance vary widely, depending on the scope of coverage sought and the age at which a person applies for such insurance. A younger person applying for such insurance will generally pay a lower monthly premium but will pay the premium for more years. Private insurance companies have the right to exclude persons based on pre-existing health conditions.
• Self-funding
Relatively wealthy persons may choose to pay for nursing home care from savings and investments. Because 10 years in an Idaho nursing home would cost more than $600,000 (not adjusting for inflation), this option is not realistic for most households.
• Community Living Assistance Services and Supports Act (CLASS)
CLASS is a provision in the recently passed federal Health Care reform legislation. Starting in 2011, persons will have the option of paying monthly premiums to a federal agency which will entitle them to approximately $75 per day if they require assistance at home for certain functions such as dressing, bathing or eating. Benefits would only be available after paying into the system for five years. Because this program is aimed at home health care, and because the future funding of this program is problematic, it cannot be viewed as a true source of funding for long-term institutional nursing home care.
• Medicaid
Medicaid and Medicare are frequently confused because of similar spelling. However, they are entirely different funding systems. Medicare pays for the medical costs of persons age 65 and older. It is an entitlement program for persons who paid into the Social Security system during their working years. Medicaid, by contrast, is a welfare system which pays for certain medical costs and is based on financial need. As noted above, Medicare will at most pay for 100 days of nursing home care. In the next article in this series I will examine the way in which Medicaid pays the largest share of nursing home costs in America, including nursing home care for a large portion of the middle class, not just the poor.
James Bendell practices law at the Grupp Law Firm in Coeur d'Alene, and is a member of the National Academy of Elder Law Attorneys.