Paying For Nursing Homes

When senior citizens are considering moving into a nursing home or receiving long-term services from elder care providers, it is important that they also consider the available options for funding this type of support. The options that many people consider include paying for these services out of pocket, receiving aid from the state that they live in, or applying for Medicaid when they are eligible. People can switch between different methods of payment, but most senior citizens will continue to be covered by insurance for medical procedures while living in a nursing home. Medicaid should not be confused with Medicare. Although Medicare does provide funding for senior citizens, it does not typically cover elder care services other than coverage for short term nursing aid after hospital stays.

Some senior citizens do not receive Medicaid coverage for elder care, so they either use personal savings or special coverage plans provided by their insurance companies. Policies like these allow for people to use life insurance funds for this purpose. It is important to understand any insurance policy fully before making a decision about a certain type of coverage.

Medicaid is a funding program, organized by both federal and state government, that finances many nursing home residents. An individual's eligibility for Medicaid or Medicare depends on:

• The nursing home that they wish to live in (whether these facilities accept Medicaid or have a bed available for those who wish to pay with Medicaid)


• Personal income and resources


• The state they reside in

Sometimes senior citizens will not qualify for Medicaid unless they have used some of their own money first. While living in a nursing home and receiving Medicaid, the government cannot lien on a senior citizen's home - that is take, sell, or hold property to recover benefits. If the owner of the property dies while in the nursing home, the government still cannot seize property if the spouse, sibling (with equity interest or lived there one year prior to their sibling's admission into the nursing home), or adolescent relative with disability is living at that residence.

Before becoming eligible for Medicaid, senior citizens are required to possess only a certain amount of assets which are specified by Medicaid. In special instances where the husband or wife of an individual who lives in a nursing home continues to live in their old residence, the spouse on the outside does not have to reduce their assets. They are allowed to keep up to half of joint assets as well as maintain a monthly income allowance. This allows one spouse to receive Medicaid while only being required to reduce half of the assets they share with a partner who may not qualify or wish to quality for Medicaid. The government works to prevent a spouse from losing assets due to costs of elder care - which is why they created "spousal impoverishment laws." This can involve the spouse legally keeping a portion of the joint assets or remaining entitled to a portion of the income the spouse in the nursing home receives on a monthly basis from respective programs.

The process of reducing an individual's assets is limited in that one is not allowed to give these away to family or friends as an alternative to putting them towards compensation to the state for elder care. That is, it is expected that individuals who wish to become eligible for Medicaid because of reduced assets will not give those assets away freely in order to receive funding from the state.

Medicaid can monitor transfer of assets within 5 years of applying for Medicaid and afterward. These transfers can be viewed as for "less than market value." This results in Medicaid not funding elder care for a certain period of time depending on how many assets were given away in order to be eligible. As before, there are exceptions to this penalty if the asset transfer involved a spouse, sibling, or disabled adolescent family member.

Another alternative to government aid or personal savings as a means to fund elder care is long-term care insurance. The advantage to programs like these is that there is much more variety in what insurance policies can cover depending on the specific plan and provider of the individual receiving elder care.