If you are faced with how to pay for the costs of nursing home care, you may be considering Medicare or Medicaid coverage. These are different types of coverage with different requirements. The costs of nursing home care may be partially covered by Medicare for a period of time if you qualify based on your medical condition. The longer-term costs of care in a nursing home could be covered by Medicaid if you qualify based on your financial situation.
In certain conditions, Medicare Part A would pay for skilled nursing services in a nursing home. To qualify for this coverage you generally must have been hospitalized for at least three days for medically necessary inpatient hospital care and admitted to a nursing home within 30 days of being discharged from the hospital. The nursing home must be certified by Medicare and the skilled nursing care must be prescribed by a doctor.
According to Medicare.gov, Medicare would cover the full cost of the first 20 days in a nursing home if you qualify. For the next 80 days you would have to make a copayment, which is $152 per day for 2014. After 100 days, Medicare would not cover any of the nursing home costs.
Medicaid could potentially cover the long-term costs of care in a nursing home. As explained by Joseph L. Matthews in an article on Caring.com, Medicaid assistance for a nursing home is only available to people who are unable to care for themselves at home. But Medicaid does not require a hospital stay prior to going to a nursing home and there is no requirement that you need skilled nursing care.
Medicaid is administered by the states, and the eligibility rules can vary by state. In general, to qualify for Medicaid to pay for the costs of a nursing home you monthly income must be below a certain amount and your total assets or resources must not be more than a certain amount. For example, to qualify for Medicaid in New York State the monthly income limit for a person with no other family members is $800 in 2013, and the resource level is $14,400. The limits increase according to the number of family members who live with you.
In determining whether you meet the resource level requirement, Medicaid looks back five years to see if you made any gifts or transfers to family members or others. For example, you may have made gifts, or signed over bank or investment accounts or the deed to your home to a family member.
If you made gifts or transfers of assets that are countable for Medicaid purposes, Medicaid will calculate a period of ineligibility for benefits. The penalty is calculated by dividing the value of the assets you transferred by the average cost of nursing home care. For example, if you gave your home with a value of $200,000 to another family member within the 5-year look back period and the average monthly cost of nursing home care is $5,000, you would have an ineligibility period of 40 months.
The penalty period doesn’t start to run the first day of the month after the month of the transfer. It starts to run on the date you are in the nursing home and would otherwise qualify for Medicaid, if you hadn’t made the transfers.
However, there are exceptions to this look back penalty. The penalty period would not apply if you transferred your home to your spouse, a child under age 21, a brother or sister who has an equity interest in the home and has lived in the home for at least one year before you enter the nursing home, or to an adult child who lived in the home for at least two years before you enter the nursing home and provided you with care that enabled you to live at home rather than in a nursing home.
Joseph L. Matthews, Medicaid Coverage of Nursing Home Care, Caring.com
Medicaid in New York State, New York State Department of Health
Skilled nursing facility (SNF) care, Medicare.gov