While skilled nursing facilities (also referred to as nursing homes, sub-acute rehabilitation centers or long term care facilities) are expensive, they’re less costly than hiring 24 hour care at home, so many people end up choosing this option. These facilities can provide long term care, but many also offer rehabilitation with the goal of returning home.
If you or your loved one may need care in a nursing home, it pays to know your payment options upfront. They include the following:
Medicare is a federal benefit that will pay for the cost of a limited number of days of inpatient rehabilitation at a skilled nursing facility. To be eligible for Medicare, you must be over age 65, have a documented disability, or have end stage renal disease.
Under what circumstances would I be in the situation of needing inpatient rehabilitation?
Many inpatient rehabilitation stays result from a hip fracture, stroke, or a cardiac condition, although there are many other reasons someone could need physical, occupational or speech therapy.
What costs will Medicare cover?
Medicare will cover the daily rate for you to receive inpatient physical therapy, occupational therapy and/or speech therapy. Medicare also covers your medications, treatments and supplies during this time.
What are the conditions under which Medicare will pay for this care?You must meet the following conditions:
- Three Day Hospital Stay
You must have had a three-day hospital stay that was considered an “in-patient” stay by the hospital. What this means is that if you were only classified as an “observation” patient, Medicare will not cover the services of a long-term/nursing home rehabilitation. Additionally, if your hospitalization was classified as inpatient but you were only there over the course of two midnights (the time they use to mark another day), Medicare will not cover an inpatient rehabilitation stay.
- Continued Progress
Once at a skilled nursing facility, you must also continue to make progress in your rehabilitation. As long as you continue to improve overall in your functioning and make progress toward your goals, Medicare will cover your nursing home rehabilitation stay. If you plateau, either because you might have a diagnosis of Alzheimer’s which limits your ability to learn new or different ways to compensate for a weakness, or physically you just aren’t able to gain strength any more, your Medicare coverage will end.
How long will Medicare pay for inpatient rehabilitation at a nursing home?
The short answer: It depends.
The long answer: Medicare will cover 100% of the first twenty days of rehabilitation in a long-term care facility, but you must continue to make progress during those twenty days to qualify for that coverage. Medicare will pay 80% of the next 80 days, provided you continue to make progress.
You can purchase coverage for the remaining 20% by buying a supplemental policy. Many supplemental policies cover that full 20% so that there ends up being no out-of-pocket expenses for your inpatient rehabilitation stay.
In which facilities will Medicare pay for this inpatient rehabilitation?
The facility must be certified by Medicare to provide this kind of medical care. You can review a list of nursing homes on Medicare.gov, as well as see how each facility is rated. Choosing and researching a facility can be a daunting task, but there are several resources available to help.
Medicare Advantage Plans
Some people have opted out of the traditional Medicare plan and instead have chosen what’s called a Medicare Advantage plan. This is Medicare coverage administered by another group instead of the federal government. Medicare Advantage plans provide similar coverage as the traditional Medicare plan, with a few exceptions:
- Some Advantage plans don’t require a three-day inpatient hospital stay. Some will provide coverage of at least the initial days at a nursing home even if the person is transferred right from her own home or has had a less than three day hospital stay.
- Some Advantage plans have providers that are considered in-network. If the skilled nursing facility you would like to go to for inpatient rehabilitation is not in your Advantage plan’s network, your services might not be covered or they may be covered at a reduced rate.
- Some Advantage plans require pre-authorization by the facility for your services to be covered, while traditional Medicare does not require this.
Long Term Care Insurance
Long term care insurance is insurance that you can purchase that pays for a certain amount of time in a nursing home / long-term care facility. The cost and amount of coverage varies significantly according to length of coverage and whether you opt for full or partial coverage.
Additionally, most long term care companies have a list of conditions or medications that might make an individual ineligible for coverage or increase the cost significantly. Those often include neurological conditions like Alzheimer’s disease or other dementias, Parkinson’s disease, certain heart conditions, and the use of certain psychotropic medications.
If you apply for long term care insurance when you are younger and generally healthier, you will pay premiums over a long period of time but at usually a much lower rate. If you apply when you’re older when the likelihood of needing a nursing facility increases, your monthly rate for long term care insurance will be much higher.
Whether long term care insurance is right for you depends on many factors, so you may want to speak with your insurance agent about cost and coverage options.
Private Pay (Out of Pocket)
One way to pay for care in a facility is to pay out of pocket, or what’s often referred to as private pay. Paying privately for facility care usually means you have many options about which facility you choose since most facilities prefer private pay or Medicare clients, rather than Medicaid.
Paying privately for nursing facilities is expensive, with costs that can range anywhere from $200-$300/day (and more) for the care. That can approach ranges of $60,000 to $100,000/year.
Many people set aside money for their care later in life, but sometimes their care needs use that money up very quickly. If a person’s financial resources have been exhausted, they can then apply for Medicaid.
Medicaid is federal government assistance that is administered by each state for those whose money has been depleted.
The specifics of Medicaid eligibility and coverage are outlined here: How Does Medicaid Work for Nursing Home Care?
Medicare.gov. Nursing Home Compare. Accessed May 31, 2012. http://www.medicare.gov/NHCompare/Include/DataSection/Questions/SearchCriteriaNEW.asp?version=default&browser=Firefox|3.6|Windows+7&language=English&defaultstatus=0&pagelist=Home&CookiesEnabledStatus=True
National Clearinghouse for Long Term Care Information. Medicaid. Accessed May 31, 2012. http://www.longtermcare.gov/LTC/Main_Site/Paying/Public_Programs/Medicaid/Index.aspx
National Clearinghouse for Long Term Care Information. Medicare. Accessed May 31, 2012. http://www.longtermcare.gov/LTC/Main_Site/Paying/Public_Programs/Medicare.aspx