Most people don’t plan on running out of money, but it can and does happen. By doing long-term care planning before you or a family member needs care, you may be able to outlive your money. Even with the most careful planning, sometimes there are not enough funds to pay for the care that a loved one requires.
Jump ahead to these sections:
- What Types of Care Does Medicaid Normally Cover?
- How Much Does Medicaid Typically Pay for Long-Term Care?
- Generally, What Are the Eligibility Requirements for Paying for Long-Term Care?
That‘s where Medicaid comes in. Medicaid is a joint federal and state program covering children, people with disabilities, and people with low income. States can establish a “medically needy program” for individuals with health needs whose income is too high to qualify for Medicaid. Low-income people with medical needs can still become eligible by “spending down” the amount of income that is above a state's income standard.
Consulting with an attorney who specializes in Medicaid might be a good place to start if you are looking to see if Medicare can help you in finding care for aging adults like your loved one. It isn’t necessary, but state qualifications can be complicated, and you will want to protect the assets that you legally can.
What Types of Care Does Medicaid Normally Cover?
For older and disabled adults, Medicaid covers services that other insurance programs may not. Even though there is a federally mandated minimum coverage requirement, each state may add services and programs covered by Medicaid. States are required to cover the following under Medicaid:
- Inpatient hospital services
- Outpatient hospital services
- Screening, Diagnostic and Treatment Services
- Nursing facilities
- Home health services
- Physician services
- Rural health clinic services
- Laboratory and X-ray services
- Family planning services
- Nurse midwife services
- Nurse practitioner services
- Transportation to medical care
- Other services involve pediatric and pregnant mothers
Some states have added benefits under Medicaid that can include others like optometry, podiatry, prescription drugs, respiratory, physical and occupational therapy, speech, language, and hearing disorders. Please check with your state to determine exactly what programs you might be eligible for and what medical services are covered.
Depending on the state, Medicaid also has the advantage of providing expanded home care services. Medicaid can also pay family members who provide caregiving to a loved one. Personal care assistance, although not mandated by the federal government, might be offered. This includes help with bathing, dressing, toileting, housekeeping, and cooking.
Under Medicare, these aide services are not permitted under the medical home health benefit. Medicaid may pay for these services on an ongoing basis as long as the need remains the same.
Home and Community Based Services Medicaid waivers
Also known as Section 1915(c) waivers, these waivers are another way Medicaid offers in-home services to support older adults. HCBS Waivers provide additional in-home benefits.
With this option, a nursing-home-level of care is generally required. Without this assistance, there would be a risk of someone going into nursing home care. Services available through HCBS Medicaid waivers may include adult day care, adult foster care, companionship, assistance with daily living activities (ADLs), durable medical equipment, and more.
Medicaid also pays for medical home health. Not all home health agencies accept Medicaid so you will want to check to ensure that the agency you pick is contracted. All of these services are listed under the Home and Community-Based Services.
How Much Does Medicaid Typically Pay for Long-Term Care?
Medicaid pays for 100 percent of nursing home care costs if you qualify. Literally everything you need except for personal items are covered. However, the Medicaid reimbursement for a nursing home is well below other payor sources.
According to the National Investment Center, “Medicaid reimburses skilled nursing properties at an average national rate of $206, less than half the rate paid by Medicare and Managed Medicare, $503 and $433, respectively.” But the cost of nursing home care may exceed the Medicaid reimbursement rate.
You may ask why this matters. In light of the surge in deaths due to the pandemic and long-standing issues with infection control, problems within adequate care in nursing homes have been exposed. Typically, nursing home care is the highest level of care outside a hospital that requires intensive staff and medical personnel.
Since most nursing homes across the country are for-profit, staffing is sometimes cut back to guarantee a return on the investment. Approximately 45 percent of COVID infections have occurred in nursing home settings.
You will want to pay careful attention to the nursing home you choose by doing some homework in advance. Before deciding that nursing home placement is your only option, check to make sure to investigate other Medicaid programs like the Medicaid Waiver Program. Under these programs, you might be able to keep someone out of a nursing home by qualifying for services provided in the home or in an assisted living community. The state pays less than what it would cost in a nursing home, and your loved one does not have to move.
Under Medicaid Waiver programs, it might be possible for your loved one to stay in assisted living, paid for by Medicaid, while receiving nursing care and aides. Some of these programs have waiting lists, and the application process can be arduous, so apply early and pay close attention to the details of the application.
In addition to the above options, it is also possible to be covered by Medicare and Medicaid (this is called being” dual eligible.”) Most people are eligible for Medicare when they turn 65 or are under the age of 65 and have been on disability for two years.
Medicaid is the primary payor source used to pay for nursing home care due to the high cost of that care. If the family has the funds to pay for nursing home care, they might have enough to pay for supportive services in the home. According to Genworth, the median cost for care in a semi-private nursing home room in 2019 was $7513 a month, but costs could be much higher than that. Private rooms in nursing homes are reserved for people who have a medical necessity, so most people will have no choice but to be in a shared room.
Generally, What Are the Eligibility Requirements for Paying for Long-Term Care?
The states determine eligibility requirements for paying for long-term care. However, there are some general guidelines. Due to the Affordable Care Act, some states have expanded Medicaid benefits by increasing the income and asset level to qualify. In general, a person over the age of 65 can make no more than $2349 a month and have no more than $2000 in assets.
Certain assets are exempt from Medicaid, such as your primary residence, car, personal items, and funeral expenses. In addition to these restrictions, federal law prohibits someone from transferring assets to a family member within five years to become eligible for Medicaid. This is called the “five years look back” period.
Just meeting the income and asset qualifications for long term care is not enough, however. Someone can’t decide to live in a nursing home because they have qualified for Medicaid. Otherwise, families might use nursing homes as a place for a family member to live because they can’t afford anywhere else.
To be accepted into nursing home care someone must also be eligible for skilled nursing home care based on medical need. In other words, they must have a skilled need. The areas of evaluation to determine eligibility include:
Physical functional abilities
The functions included in this category are dressing, bathing, transferring, personal hygiene, eating and swallowing, and toileting. In other words, does your loved one require considerable assistance with activities of daily living?
Your loved one must also have medical needs that cannot be taken care of by a home caregiver.
Some states restrict the type of care a family caregiver can provide which include medical necessities such as catheter care, IV medications, wound care, medication administration, or a ventilator.
Cognitive or behavioral issues
Memory and other cognitive issues due to dementia or Alzheimer’s may prevent the person from living independently or even in assisted living. Behavioral problems could also be preventing someone from residing safely in a less restrictive environment.
Some states will not accept dementia as the only reason to qualify for nursing home care. There must be other skilled needs as well. This is to prevent families from using a Medicaid nursing home bed without a skilled nursing need. Each state will determine the nursing home level of care and use several assessment tools to determine eligibility. A re-evaluation of nursing home needs is done every 12 months.
Medicaid and Long-Term Care
Although it might not seem like a positive development to qualify for Medicaid, you can see that the program has many benefits. The true benefit to Medicaid lies in your ability to find out the services that your state has to offer so that your loved one has safe and consistent care. If a nursing home is the only option, take the time necessary to find the best one possible.
- Liberman, Liz. “Medicaid Reimbursement Rates Draw Attention.” NIC. 21 March 2018, www.nic.org/blog/medicaid-reimbursement-rates-draw-attention/#:~:text=According%20to%20the%204Q2017%20NIC,of%20the%20fourth%20quarter%202017.
- “Nursing Home Costs by State and Region.” National Council on Aging, www.medicaidplanningassistance.org/nursing-home-costs/
- “Eligibility.” Medicaid.gov, www.medicaid.gov/medicaid/eligibility/index.html
- “Cost of Care Survey.” Genworth Financial, www.genworth.com/aging-and-you/finances/cost-of-care.htm