How will I pay for nursing home care when I need it?

The biggest worry of many seniors is that they will go broke paying for Nursing Home Care.  That’s exactly what happens to a lot of people who do not plan for the possibility of Long Term Care.  In fact one study estimated that 72% of nursing home patients are impoverished within the first year of care.* Medicare is the health care program that seniors rely upon.  Medicare reliably pays for much of the medical treatment most seniors need.  But there is a myth that Medicare will pay for long term nursing care.

It does not.

Medicare will only pay for nursing home expenses that immediately follow at least three days of hospitalization.  The treating physician must make a finding that the patient is in need of skilled nursing care.  For the first 20 days Medicare will pay the full expense.  After that the patient must make a co-payment.  After a total of 100 days the patient must pay the entire cost of the nursing home. People plan for nursing home costs in one of two ways.  Some people engage in proactive planning.  Others must resort to emergency planning Proactive planning occurs well in advance of anyone needing nursing care.  Proactive planning includes:
    Self-Funding - Families either have sufficient income or save sufficient assets to pay the cost of nursing home care.

    Long Term Care Insurance – Families purchase Long Term Care Insurance policies which will pay all or part of nursing home expenses.

    Proactive Medicaid Planning – Medicaid is the government program that pays nursing home expenses for those who have already depleted their assets and are now broke.  Medicaid will look back five years to see if an applicant has changed the title to any assets.  If they have, the applicant will be disqualified for benefits for a specified period of time.  Some assets can be placed in special trusts.  If an application is made to Medicaid more than five years after creating this trust the assets will be protected.
Emergency planning is just that.  The patient needs nursing home care now.  It’s too late to purchase Long Term Care Insurance or to set up special trusts.  But there are still alternatives.  Often emergency planning can still save a substantial portion of one’s assets even after entering the nursing home. Click here to get our free report “Solving the Medicaid Puzzle”, which talks about Emergency Planning options in-depth.

*Kroman, Gregg. “Why are we Pretending Not to Know When to Buy Long-Term Care Insurance?” Compensation and Benefits Review 32.3 (2000): 50-53.