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What Costs Will Medicare Covers in a Nursing Home?

(2/9/06)- Elder law specialists are urging their prospective clients who are figuring on having Medicaid pay for their nursing home costs to expedite their estate tax planning before Congress acts to tighten the laws.

Although laws vary from state to state and whether a resident is married or not, patients generally are eligible for Medicaid to help pay for their nursing home costs after using up all but $2,000 of their cash and investments. In most states your home and car are exempt from being included in your assets for Medicaid purposes.

Among the changes being contemplated by pending Congressional action are a proposal that would prevent a person with equity in a home of more than $500,000 from qualifying for Medicaid coverage, although states will be able to raise the limit to $750,000. Under current law, primary residences of any value are generally exempt.

Another of the proposed changes would be one where the "look-back" period of time is increased from 3 years to 5 years.

(1/9/06)- In reaching a budget accord, Congress has made certain changes in Medicaid and Medicare beneficiary coverage limitations The changes enacted allow states to charge higher premiums and higher co-payments for a wide range of Medicaid benefits, including prescription drugs, doctors' services and hospital care. Medicaid recipients can be charged 10% of the cost of any item or service if their family incomes were 100% to 150% of the federal poverty level, $12,830 to $19,245 for a family of two. Recipients above that can be required to pay 20% of the cost of any item or service.

Total co-payments for all people in a family cannot exceed 5% of family income. States would not have to provide a Medicaid recipient with all the services now required by federal low, but can off a more modest package of benefits resembling commercial insurance. States will be allowed to end Medicaid coverage for people who fail to pay premiums for 60 days or more. Pharmacists can refuse to fill prescriptions and doctors and hospitals can deny services for recipients who do not make required co-payments.

Another change would require states to look for inappropriate asset transfers during the five years before a Medicaid application, instead of the current three-year look-back provision that now exists.

Certain annuities would be classified as assets that trigger the waiting period; annuities are sometimes used to change a large asset into a smaller asset so that Medicaid eligibility can arise.

(10/29/05)- The Senate has approved a $612 billion domestic spending bill that included a provision to spend $7.97 billion on asian flu vaccines to try and prevent the spread of a pandemic should the disease break out in humans in this country. The bill was adopted by a vote of 94-3. The expenditures exceeded President Bush's budget request for labor, health and education expenditures by several billions of dollars.

The bill included a provision that disallowed Medicaid coverage in nursing homes if the equity in a home that a resident owns exceeds $500,000. State and federal rules that allowed some long term Medicaid coverage in nursing homes for residents above the poverty level would be disallowed. States were given leeway to increase the home equity allowance up to a $750,000 amount.

(9/11/05)- The proposed Bush budget calls for cutting Medicaid expenses, which is currently running at a figure of $329 billion this year, by at least $10 billion over five years. A commission convened by the HHS, which oversees Medicaid, came up with several proposals recently including increasing the look-back provision from 3 years to 5 years for gifts made by a Medicaid beneficiary to another individual or other party.

Patients generally are eligible for Medicaid to help pay for long term care after using up all but $2,000 of their cash and investments. They can keep their house and car, but recently state officials have imposed liens on the homes of Medicaid beneficiaries who pass away. Many states are looking to restrict these amounts even further.

Last year the cost per patient for long-term care averaged $72,240, including nursing homes, assisted-living facilities and home care, according to General Electric's Glenworh Financial unit in Richmond, Va., a long-term care insurer.

(1/6/04)-One of the most frequently asked questions that arise when a friend or relative enters a nursing home relates to the coverage of costs by Medicare. We will go over some of the basic rules and answers to this question.

Two recent surveys on nursing home costs suggests that the annual cost continues to rise at rates much greater than inflation. According to the GE Financial Survey, the annual average cost of a nursing home has reached $57,000. This survey was carried out in all fifty states this past May and involved 2218 skilled nursing homes and intermediate care homes.

The other survey by Met Life indicated that the average national cost of a semiprivate room in a nursing home is now $158.26. The costs for therapy, rehabilitation, and medication were not factored into the survey. The cost of assisted-living facilities rose 10% to an average $2,379 a month, or $28,548 a year. These rising costs are in contrast to the decline in staffing nationwide and reports of decline in quality of care.

According to a study from the National Alliance for Caregiving, Bethesda, Md. and AARP, 24% of the nation's caregivers to an elderly or disabled person lived with the person they were caring for, up from 21% in 1997.

There is also a variation of costs in the 50 states, with Alaska ranking first at $166,700 and Louisiana last at $35,000. New York City average annual cost is $105,500, with the rest of the state averaging $78,700. Neighboring New Jersey came in at an average of $80,100, while in Connecticut the average annual cost was $97,400 and in Boston it was $89,800.

The first rule that hits you squarely in the eye is that Medicare Part A will pick up some of the costs only if the individual is in a Skilled Nursing Facility (SNF). A Skilled Nursing Facility is one in which a doctor, nurse, or occupational or speech therapist provides skilled care directly to you. Medicare must approve the facility as a SNF facility.

Medicare Part A will help pay for your care if you meet all of the following conditions:

Medicare cannot pay for services that are determined to be custodial. Custodial services are those services that are mainly for the purpose of helping you with daily living activities.

If you meet all of the above requirements Medicare Part A will pay according to the following time schedule:

 

HMOs and Skilled Nursing Care Facility Coverage

Many Medicare HMOs have a "lock in" rule which provide coverage only if the member uses a SNF within the provider's network. If you are in an HMO the following rules apply:

Once Medicare Part A benefits have ended, you may still be entitled to coverage of certain items under Medicare Part B. This includes: lab work, x-rays, medical supplies, orthotics, prosthetics, physical therapy, occupational therapy, speech therapy and specialty drugs like Hepatitis B vaccine, influenza and PPV vaccines, certain oral anti-cancer drugs and immunosuppressive drugs.

Even though your Medicare Part A benefits may have ended you still may be entitled to therapy coverage within the following limitation:

If you are receiving therapy during a hospital or SNF stay covered by Medicare Part A or from a hospital outpatient department, the caps do not apply. If you disagree with a decision on the amount that Medicare pays on a claim or whether Medicare covers services you receive, you always have the right to appeal the decision.

FOR AN INFORMATIVE AND PERSONAL ARTICLE ON PRACTICAL SUGGESTIONS WHEN SELECTING A NURSING HOME SEE OUR ARTICLE "How to Select a Nursing Home"

By Allan Rubin and Harold Rubin
updated February 9, 2006

http://www.therubins.com

To e-mail: hrubin12@nyc.rr.com or rubin@brainlink.com

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