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Paying for Senior Housing Care

Confused about the relationship between Medicare, Medicaid and long term housing solutions? Read below for some clarification. (Provided by the Better Business Bureau)

Medicare

Many people mistakenly believe that Medicare, which is administered by the Health Care Financing Administration, covers the costs of most long-term care services. In reality, Medicare only covers short- term, acute care during a hospital stay.

Medicare is a federal insurance program that provides insurance to millions of Americans who meet the following criteria:

  1. People who are 65 years of age
  2. People who are disabled; and
  3. People with permanent kidney failure.

Medicare (Part A) may help to pay for nursing care only if a person meets all of the following conditions:

  • A person requires daily skilled nursing or skilled rehabilitation services that can only be received in a Skilled Nursing Community (SNC). This need must be certified by a doctor.
  • A person has been hospitalized for at least three days in a row (not including the day of discharge) prior to entering a SNC.
  • A person enters the SNC within a short time (usually 30 days) after leaving the hospital.
  • A person's care is for an illness that was treated in the hospital or arose when he or she was in a SNC for an illness treated in a hospital.

Medicare (Part A) can help pay up to 100 days of skilled care in a SNC during a benefit period. It pays for all covered services for the first 20 days. For days 21-100, a daily co-insurance amount can be charged to a Medicare recipient. If a person requires more than a 100 days in a benefit period, he or she is responsible for all charges beginning with the 101st day of continued residence at a SNC.

Medicaid

Medicaid is an assistance program jointly financed by federal and state governments for needy and low-income people of all ages. Using broad federal guidelines, states design their own programs. Therefore, exact details of eligibility will vary from state to state.

Under certain qualifying conditions, Medicaid will pay for care in Skilled Nursing Communities (SNCs) and also Intermediate Care Communities (ICCs). Depending on the situation, if a person is eligible for both Medicare and Medicaid, Medicare will pay for its allowable benefits period if all requirements are met, after which, Medicaid will take over the financial assistance.

Private Insurance Policies

Some insurance companies offer private insurance policies specifically for long-term skilled nursing care. These policies vary widely in coverage and cost, and it is important to understand precisely what kind of policy you are purchasing.

Make sure the policy being considered does not duplicate skilled nursing coverage provided by any coordinated care plan such as Medicare or Medicaid or other coverage already received. Check for any prerequisites required before the company will pay benefits. For example, ask if the company requires that a patient have prior hospitalized before any benefits are paid out. Some diseases such as arthritis-related problems and Alzheimer's do not require hospitalization before the need for nursing care arises.

If possible, seek an insurance policy that pays benefits immediately upon entry into a nursing care community. Many insurance policies, which are purchased prior to the need for nursing care, require a waiting period after entry into a nursing care community before payments are made. It is highly unlikely that nursing care insurance can be purchased after a person has entered a nursing care community.

Another private insurance policy, Medigap supplemental insurance, is designed to close the gap between medical costs and amounts paid by Medicare. However, both Medicare and Medigap are primarily designed for short term, acute care and, consequently, are unlikely to meet the long-term needs of nursing care residents.

As in all insurance policies, it is vital that you understand exactly what your policy covers. Specific questions about policies should be directed to your state's insurance commissioner.