Let’s be honest, nobody wants to go to a nursing home, but the time may come that it is a necessity for one’s safety and well being. The greatest challenge that a family faces is finding the resources to pay for expensive nursing home care, which can be an average of $5,000.00 per month.
There are four ways to pay for nursing home care: (1) Medicare; (2) Long Term Care Insurance; (3) Private Pay; and (4) Medicaid.
First, Medicare is the government insurance plan for seniors age 65 and older. Medicare does not pay for a nursing home stay indefinitely, and will only pay in certain circumstances. For Medicare to pay for your care, you must have a qualifying three day hospital stay that results in your placement in the nursing home for rehabilitative therapy (i.e., to help with walking, stabilizing medications, etc). Once your rehabilitation plateaus, and you are not making any more improvement, Medicare stops paying. The maximum number of days Medicare will pay is 100. The nursing home has certain responsibilities to give you notice to the patient or responsible relative of Medicare’s refusal to pay further. If such notice is not properly given, you should see a lawyer to discuss options for appealing this decision.
The second option for nursing home payment is Long Term Care Insurance. This type of insurance is not typically offered to those with chronic medical conditions or diagnoses that may result in nursing home placement by the nature of the condition. Therefore, if you already have a diagnosis of dementia, you likely won’t be able to take out this policy. The terms of a policy should be reviewed carefully for coverage and omissions. Your elder law lawyer should be consulted to review your policy before you agree to sign-up.
The basic payment option is to private pay for one’s care. This is an expensive proposition and will deplete resources rapidly. However, for those with the financial security, obtaining the “Rolls Royce” of care is an attractive option. Once Medicare coverage and Long Term Care Coverage cease (if they were available to the patient), a person must private pay for their care.
Finally, what does one do when they run out of assets to private pay for their care? Medicaid can cover the continuing costs. However, I am often asked, “I don’t want all of my money to go to the nursing home. What can I do?” The simple answer is that you should speak to an elder law attorney early – do not wait until your loved one is ready to go to the nursing home or already there. At that stage, there is often very little that can be done to minimize the loss of assets.
Creating trusts or giving away assets in order to preserve them, if not done properly with the advice of an elder law attorney, can result in Medicaid denying your application for benefits.
When you apply for Medicaid, the State of Illinois Department of Human Services determines whether you meet the asset and income requirements to be eligible. Generally, a person in the nursing home can only have $2,000 in assets ($3,000 if married). The monthly income of the person living in the nursing home, including Social Security, all goes to the nursing home to pay for the bill. If you are married, some rules are slightly different that allow a spouse, who still lives at home, to keep more assets and income. However, the State has the right to examine records of your assets for the last three (3) years.
If you have placed your house in the name of a child or have given a large amount of money to a child during this 3-5 year period, your eligibility for Medicaid could be in jeopardy. Such transfers of property, with certain limited exceptions, can result in a denial of your Medicaid application. The reason for this is that the government has adopted the policy that if you have the resources to pay for your care, you should use those first before society has to pay for you.
Therefore, before hastily deciding to change title on your house or your bank accounts, you should speak with an attorney familiar with the Medicaid rules to determine what is best. Of course, the best thing to do is plan well in advance with such an attorney to avoid these pitfalls while still in good health.