Most health insurance, other than “long term care” insurance, doesn’t provide coverage for nursing home care. However, depending on your situation, Medicaid and Medicare may cover some or all of your expenses.
Medicaid vs. Medicare – What’s the Difference?
Medicare is a federal-state assistance program that’s designed to provide health coverage for low-income people of any age. Medicaid and the Children’s Health Insurance Program (CHIP) provide free or low-cost health coverage to millions of Americans, including families and children, pregnant women, the elderly, and people with disabilities.
If you are eligible for Medicaid, you typically won't have to pay for covered medical expenses, or you'll only need to pay a small-copay. Medicaid is administered by the state and although coverage varies from state to state, it must meet federal guidelines.
Medicare is a federal program. It’s run by the Centers for Medicare & Medicaid Services, an agency of the federal government. Medicare doesn’t vary state to state like Medicaid. It’s the same everywhere in the U.S.
Medicare isn't an assistance program like Medicaid; instead, it's considered an insurance program. Medical bills are paid from trust funds that you’ve paid into over the years.
You become eligible for Medicare when you turn 65. Medicare is also available for dialysis patients and younger disabled people. You’ll pay part of your medical or hospital costs through deductibles. A small monthly premium is required for non-hospital coverage.
What Benefits Does Medicaid Provide For Nursing Home Care?
Medicaid covers long-term nursing home care services for low-income elderly and disabled Medicare recipients. All states have a Medicaid program for individuals who need nursing home or long term care (called Institutional Medicaid). It provides general health coverage and coverage for nursing home services, and it includes room and board, nursing care, personal care, and therapy services.
Nursing Facility (NF) Services are provided by Medicaid certified nursing homes for three types of services:
- Skilled nursing or medical care and related services
- Rehabilitation needed due to injury, disability, or illness
- Long term care: This is health-related care and services (above the level of room and board) that aren’t available in the community and are needed regularly due to a mental or physical condition.
What Are The Requirements For Medicaid Eligibility?
Most people who stay in nursing homes eventually qualify for Medicaid. To be eligible for Medicaid, your income and assets must not exceed the levels set by your state.
Medicaid requires you have a limited income and assets before it pays for nursing home care. This means that you must “spend down” your available income and assets before Medicaid kicks in.
What typically ends up happening is that nursing home residents begin by self-paying for services. As their financial resources are depleted, they eventually become eligible for Medicaid.
Some assets are excluded from the “spend down.” In most cases, you can keep a home of modest value as long as you intend to return to it if possible. It’s okay if there’s no realistic chance that this can happen. The intent to return home is all that’s needed. Neither the government nor the nursing home can take your home as long as you live.
Once the state says that you're eligible for Medicaid, they will decide if you qualify for long-term care services. According to the Administration on Aging, most states use a specific number of personal care and other service requirements for you to qualify for nursing home care or home and community-based services. There may be different eligibility requirements for various types of home and community-based services.
To determine if you qualify for your state's Medicaid (or Children's Health Insurance) program, visit: https://www.healthcare.gov/medicaid-chip/eligibility/.
What Benefits Does Medicare Provide For Nursing Home Care?
Medicare only provides short-term support for nursing home care. Most senior citizens have Medicare; however it only provides limited nursing home benefits and only for skilled care. Unlike Medicaid, Medicare doesn’t pay permanent residency costs for custodial care received at a nursing home.
Medicare Part A covers inpatient hospital stays, home health services, short-term skilled nursing facility stays with certain restrictions and hospice care. It covers care in a skilled nursing facility if you stayed at least three days in a hospital.
Medicare doesn't cover residency or custodial care services such as assistance with activities of daily living (ADLs) like bathing, toiletry, or assistance with meals. Nursing home custodial care by itself doesn’t meet Medicare requirements.
What Are The Requirements For Medicare Eligibility?
Medicare is available for U.S. citizens at age 65 or older, younger people with disabilities and people with End-Stage Renal Disease.
Medicare has two parts, Part A (Hospital Insurance) and Part B (Medicare Insurance). You are eligible for premium-free Part A if you are age 65 or older, and you or your spouse worked and paid Medicare taxes for at least ten years.
You can get Part A at age 65 without having to pay premiums if:
- You are receiving retirement benefits from Social Security or the Railroad Retirement Board.
- You are eligible to receive Social Security or Railroad benefits, but you have not yet filed for them.
- You or your spouse had Medicare-covered government employment.
If you (or your spouse) did not pay Medicare taxes while you worked, and you are age 65 or older and a citizen or permanent resident of the United States, you may be able to buy Part A.
If you are under age 65, you can get Part A without having to pay premiums if:
- You’ve been entitled to Social Security or Railroad Retirement Board disability benefits for 24 months. (Note: If you have Lou Gehrig's disease, your Medicare benefits begin the first month you get disability benefits.)
- You are a kidney dialysis or kidney transplant patient.
While most people don’t have to pay a premium for Part A, everyone must pay for Part B if they want it. This monthly premium is deducted from your Social Security, Railroad Retirement, or Civil Service Retirement check. If you don’t get any of these payments, Medicare sends you a bill for your Part B premium every three months.
To find out if you are eligible and your expected premium, go the Medicare.gov eligibility tool.