Who Will Cover My Expenses When I’m In A Nursing Home?Submitted by DSI Wealth Management on May 11th, 2015
Unless you have purchased long-term care insurance, your options are limited to preparing financially ahead of the time when you might be admitted to a nursing home. A second idea would be relying on a government-run program to pay for nursing home expenses. Even if you may choose to rely on a government program, your choices are going to be severely limited. If you have long term care insurance, the federal government says this form of insurance coverage can be used to pay for your stay in a nursing home.
Family Member Designated as a Caregiver
You may be able to see a day in the near future when you need to move into a nursing home. Medicaid is one choice, but it won’t pay for all of your nursing home expenses. This government program pays your nursing home less per month than private-pay residents and their family members pay.
Financial advisors may recommend that people anticipating entering nursing homes choose a family member who will agree to become a back-up payment method for the monthly nursing home bill. You avoid the need to turn to Medicaid for payment of this bill. The back-up person becomes responsible for covering the bills should you use up all your private insurance coverage or personal funds.
Not everyone qualifies for Medicaid. Those who do have been found eligible through “means testing,” which looks at their income and assets. If you fall into this category, Medicaid will cover non-medical activities of daily living, or custodial care. You will need to find a nursing home certified by Medicaid. That nursing home must accept Medicaid payments – but many limit how many residents on Medicaid they will accept.
You don’t have to show proof of a hospital stay before admitting to the nursing home. You don’t have to show proof that you need skilled nursing care or that you are recovering from a serious illness or injury.
Family Member Trust Funds
This option requires prior financial planning so you can protect your assets from the high monthly bills a nursing home can generate. On average, one nursing home resident can expect to pay more than $70,000 for nursing home care. Once they have run through savings, investments and other assets, they must rely on the government or family members for help.
Legally, you can protect your assets from future nursing home care. At least five years before you anticipate having to check into a nursing home, create a major gift to your children. If one of your children covers most of the cost of your nursing home care, they can deduct this in their taxes.
Long Term Care Insurance
Under the Patient Protection and Affordable Care Act (PPACA), most health insurance policies are designed to be comprehensive, allowing you to cover most of your health care needs. If you buy a long term care insurance plan, and you have to be admitted to a nursing home, your plan will cover your stay.
Here’s what long term care insurance covers:
- Adult day care services.
- Respite care.
- Health care at home (which covers skilled nursing care, personal care, and occupational, physical, rehabilitation and speech therapy).
- Care in a hospice setting.
- Assisted living;
- Alzheimer’s and dementia care facilities.
- Nursing home care.