One of the misconceptions related to a nursing home stay is that Medicare will pay for it. While there is some possibility of a Medicare payment, there are certain requirements and limitations.
Medicare is the federal health insurance program for people who are 65 or older and certain younger people who have disabilities or specific diseases. Payments by Medicare for nursing home care, if any, are only provided on a limited basis, and not for long-term needs.
There are many limitations. For example, Medicare requires a qualifying in-patient hospital stay within 30 days of your nursing home admission. Observation status does not qualify as an in-patient hospital stay. In addition, Medicare requires that the patient is receiving daily skilled care in the nursing home. Otherwise, you get no payment from Medicare.
Most people residing in nursing homes are not receiving what Medicare considers to be skilled care. Skilled care is care which involves skilled nursing or rehabilitative personnel such as registered nurses, licensed practical nurses, or physical therapists. Because of these restrictions, most people who enter a nursing home don’t get any Medicare coverage at all.
Even if you do qualify for Medicare, it will only pay for a limited period. As long as you meet the prior in-patient hospitalization and skilled care requirements, Medicare will pay in full for the first 20 days. After that, if you continue to meet the skilled care requirement, you must pay the first $194.50 a day (in 2022) and Medicare will pay the rest of the daily bill. Many people have Medicare Supplement or Managed Care coverage that will pay the initial $194.50 for them. At maximum, this coverage will extend to 100 days per spell of illness. Very few people receive 100 days of coverage.
It turns out that Medicaid (not Medicare), the joint state and federal program, covers most (66%) of the payment for the long-term care of nursing home residents. Medicare pays for 13 percent of care. In 2022, the average daily cost in a nursing home rose to $482.50, a large increase from 2021’s average daily cost of $364.90. Rates are clearly rising, and it is prudent to plan ahead as most families do not have $175,000 a year to spend on care. There are other payment sources and planning techniques available. It is best to consult with a specialist.
More information is available at www.medicare.gov on the limitations of Medicare coverage of nursing home costs.