Before admitting a family member into a nursing home, the family of the resident will need to make appropriate financial arrangements to ensure that the resident’s stay will be properly paid for. This is one of the subjects that Mr. Abril will be addressing in his teleconference titled “Recovering Debts for Nursing Homes and Healthcare Facilities” presented by the National Business Institute on March 26, 2018 from 2:00 pm – 3:30 pm EST.
The average cost for a private room at a nursing home facility in the United States can cost more than $8,000 per month or $97,455 per year. A semi-private room can be less expensive but certainly still carries a hefty price tag at $85,775 per year. Given these exorbitant prices, many residents attempt to apply for Medicaid coverage prior to their admission to a nursing home.
Medicare Part A benefits cover in-patient hospital treatment as well as skilled and intermediate nursing care, home health care and hospice. Nursing homes are not covered by Medicare without a skilled component. Additionally, skilled nursing is only available for 100 days per benefit period after three consecutive days of a hospital stay. Additionally, the first 20 days of skilled nursing do not require copayment but days 21-100 required a copayment of $164.50 per day in 2017.
As many individuals do not have Long-Term Care Insurance (LTC) due to the cost prohibitive nature of such coverage, Medicaid becomes the benefit of last resort for many residents and their families. Generally, Medicaid is a federally funded health care program for low income families. Medicaid is administered by each state, so the information in this article will vary depending on the state.
Medicaid tests applicants for both income and asset eligibility. Applicants must pass BOTH tests in order to qualify for Medicaid.
The Income Test
A nursing home resident cannot have more than $2,199.00 per month in gross income from all sources. The amount mentioned was the monthly benchmark for 2016 but fluctuates annually. If the applicant’s income exceeds this amount they will not qualify for Medicaid. However, an experienced attorney can assist the applicant by setting up a Qualified Income Trust to lower the applicant’s income to help them qualify for Medicaid. The downside of this is that Medicaid will need to be reimbursed for its expenses upon the resident’s death, if any assets are remaining in the trust.
The Asset Test
The asset limits for this test will depend on whether the applicant is single or married and will vary annually. Further, there are assets which are exempt under this test and assets which must be considered by this test. Examples of exempt assets in Florida are: a homesteaded residence, one car of any value, an income producing property, burial plots and/or accounts, household and personal belongings, the principal in certain annuities and IRAs or other qualified plans, etc. Countable assets include checking and savings accounts, stocks, bonds, mutual funds, etc. If the resident’s spouse is over the asset test limits they will have to “spend down” on the resident’s nursing home care until they qualify under the Asset Test for Medicaid coverage. Some call this the “pre-death tax”.
For details about how your facility can help its residents successfully apply for Medicaid coverage or how your family member may avoid the “pre-death tax” by qualifying for Medicaid, tune into Mr. Abril’s teleconference on March 26, 2018 from 2:00 pm – 3:30 pm EST.