Deficit Reduction Act Changes the Way We Think About Medicaid - Nursing Homes

I'm still dumbfounded that Congress determined it was necessary to take away much of the Medicaid Planning that was available to the public.

What is Medicaid you ask? Well, it's complicated.

This is a federal and state funded and state administered medical benefit program which can pay for the cost of the nursing home if certain asset and income tests are met.

There are basically four ways to pay for nursing home care:

1. Private Pay. This is the method many people are required to use at first. Quite simply, it means paying for the cost of a nursing home out of your own pocket. Unfortunately, with nursing home bills averaging between $4,000 and $4,500 per month in our area, few people can afford a long term stay in a nursing home.

2. Long Term Care Insurance. If you are fortunate enough to have this type of coverage, it may go a long way toward paying the cost of the nursing home. Unfortunately, long term care insurance has only started to become popular in the last few years and most people facing a nursing home stay do not have this coverage

The first two methods of private pay (i.e. using your own funds) and long term care insurance are self-explanatory, our discussion will concentrate on Medicare and Medicaid.

3. Medicare - This is the national health insurance program primarily for people 65 years of age and older, certain younger disabled people, and people with kidney failure. Medicare provides short term assistance with nursing home costs, but only if you meet the strict qualification rules.

4. Medicaid - This is a federal and state funded and state administered medical benefit program which can pay for the cost of the nursing home if certain asset and income tests are met. Since the first two methods of private pay (i.e. using your own funds) and long term care insurance are self-explanatory, our discussion will concentrate on Medicare and Medicaid.

Medicaid has traditionally been the way many people paid for long term stays in skilled nursing facilities. For instance, if a loved on is facing a nursing home stay due to an illness such as Alzheimer's, Medicaid may pay for these costs. But the rules are much tougher now than they have ever been, due to changes in the law that occurred in 2006 under the Deficit Reduction Act (DRA)

The main thing to note is that there are many ways to still qualify for Medicaid paid nursing home care, and many planning techniques that may still be available, even under these tough new laws. But you need a qualified Elder Law Attorney to help you navigate through the ever rising riptides.