For long-term care, who pays?

By Stephen Nohlgren
Published August 28, 2007

Nursing home and assisted-living expenses can be costly and confusing. Here are some guidelines:

PRIVATE PAY: This is a contract between you and the nursing home when you do not qualify for government assistance. Long-term care insurance is a form of private pay.

MEDICARE: Contrary to many people's expectations, Medicare does not pay for much nursing home care.

To qualify for Medicare, residents must need skilled nursing services for rehabilitation, such as help recovering from a stroke or broken hip. Usually this care must be preceded by a hospital stay of at least three days and it does not last long. In these circumstances, Medicare pays the bill for 20 days.

Medicare does not pay for residents who simply need "custodial" help with bathing, dressing, medicine, eating, etc.

Medicare does not pay for assisted living.

MEDICARE SUPPLEMENT INSURANCE: Many people mistakenly believe their supplemental policies pay "what Medicare doesn't." That's incorrect. Supplement policies, commonly called "Medigap," only pay co-payments and deductibles for services that Medicare covers. Because Medicare does not cover custodial care in nursing homes or assisted living homes, neither do supplement policies.

MEDICARE ADVANTAGE PLANS (HMOS): They cover skilled nursing for rehabilitation. They do not cover custodial care.

MEDICAID: This federal-state program does pay for custodial care, which is why many people live for years in nursing homes on Medicaid.

Theoretically, Medicaid is reserved for poor people who are over 65 or disabled, but the income and asset thresholds for nursing home assistance are much higher than for other types of health care.

A married couple, for example, can have a paid-off house, an expensive new car and about $100,000 in savings, and one of them can still qualify for Medicaid in a nursing home.

In addition, lawyers can often find legal ways to structure income and assets so even the wealthy can qualify for Medicaid.

Rules vary from state to state and can be complicated: Be wary of unprofessional advice, such as giving away money to children. Missteps can lead to disqualification.

Besides financial requirements, Medicaid requires that people pass a physical assessment that verifies that they really need a nursing home. This is handled through the Department of Elder Affairs' CARES unit, which does free assessments upon request.

(Go to elderaffairs.state.fl.us and click on CARES on the home page.)

CARES evaluators will do the assessment in your home, even if you plan to pay privately.

After you pick a nursing home, someone in its admissions office should help you apply for Medicaid and direct you to the CARES unit.

Though Medicaid typically does not pay for assisted living, Florida has a few "waiver" programs that might. People usually must meet the criteria for Medicaid in a nursing home. These programs often have waiting lists. For more information, go to ahcaxnet.fdhc.state.fl.us/nhcguide and click on "Alternatives."

Stephen Nohlgren can be reached at (727) 893-8442 or nohlgren@sptimes.com.