As our parents, spouses, and other family members get older, the subject of nursing homes shouldn't be overlooked. While we'd all like to grow old at home or under the care of close family, sometimes that isn't possible, and a nursing home is the best option. A nursing home is a full-time residential community that provides rooms, meals, and around-the-clock care for people who don't need to be in a hospital but can't be cared for at home. And because the cost of nursing home care is so expensive, paying for it should be planned well ahead of needing it.
How much does it cost to stay in a nursing home?
According to a 2012 MetLife survey, the average cost of a private room in a nursing home is more than $90,000 a year. The survey also revealed other facts that indicate planning for the cost of nursing home care should be a priority, such as:
Rising costs: the yearly cost for nursing home care in 2012 increased by nearly 4% over 2011.
Semi-private rooms aren't much cheaper: A semi-private in 2012 cost $222 daily, or more than $81,000 per year.
Twenty-percent of nursing homes surveyed charged more for Alzheimer’s or dementia care.
Add this to the fact that, in 2004, the average stay in a nursing home lasted over 800 days, and it's easy to see that without proper planning, you could lose your life's savings paying for nursing home care.
What are ways to pay for a nursing home stay?
There are four main ways to pay for a nursing home stay:
Cash out of your pocket
Private Long Term Care Insurance
How does Medicaid pay?
Medicaid is a joint federal and state government program that helps people with low income and little assets pay for their nursing home cost. Generally, to be eligible for Medicaid, your income and asset levels can't exceed levels set forth in your state. Medicaid officials will "look back" at your financial information over a certain number of years to determine if you have been getting rid of property in order to receive Medicaid. However, if you have assets over the allowable level, you are permitted to "spend down" or decrease your assets before you receive Medicaid. Typical spend down costs include medical expenses, mortgages and other debts, and funeral expenses. Also, your house and car are generally not counted against you for qualification purposes, and therefore don't have to be spent down. States vary in their eligibility requirements, so you should check with your state social services office or an elder law attorney for specific information.
Also, keep in mind that not all nursing homes accept Medicaid, so you'll need to ask about a particular nursing home's policy. To find nursing homes that accept Medicaid, click here.
What is private long-term care insurance?
Private long-term care insurance is an insurance policy that's purchased separately from your primary medical insurance, similar to buying life insurance. In other words, the insurance coverage that covers your doctor's appointments and prescriptions won't cover nursing home stays; if you want nursing home costs covered, you'll have to purchase long-term care coverage. Long-term care insurance can be very costly and not all policies are the same, so it is important to thoroughly evaluate all policy information before purchasing it. To find out more about this type of insurance, click here.
How does Medicare pay for nursing home care?
Medicare helps pay for short stays (not more than 100 days) in a nursing home if:
You have had a recent prior hospital stay of at least 3 days;
You were admitted to a Medicare-certified nursing home within 30 days of your prior hospital stay; and
You need skilled nursing services.
The earlier you begin planning for the cost of nursing home care, the better chance you have of being able to afford it without causing you or your family undue financial hardship. Find an elder law attorney qualified to discuss issues related to the cost of nursing homes and related programs in your state.