Paying for Long-Term Care / Skilled Nursing Care Guide
We created this guide because paying for long-term care can be confusing. Other guides may go more in-depth, but we wanted to keep this simple and informative. This is the basic information you need to know about paying for long-term care. There are many different types of Long-Term Care, but this guide will be focused on Skilled Nursing Facilities (SNF), Nursing Homes (NH), and Assisted Living Communities (ALC). Often SNF and NH are used interchangeably, but there is a significant difference.
There are three basic ways to pay for long-term care: private insurance, government programs, and out-of-pocket. We will not talk about private long-term care insurance at this time because if you have private long-term care insurance you have already done some research. This guide will primarily focus on using out-of-pocket and government programs.
Out-of-pocket
This is the easiest, but most painful way to pay for long-term care. There are no qualifications needed. Providers will perform an assessment on the individual needing long-term care and based on the assessment will fall under a specific rate. The rates vary depending on the needs of the individual. Rates are usually calculated on a per-day basis. Now for Skilled Nursing Facilities can range from $200 – $500 per day, Nursing homes between $100 – $140 per day. For Assisted Living Communities will vary depending, but most will have a flat monthly fee like an apartment and prices will range depending on a number of factors like size of the room and amenities.
Now it becomes painful as individuals can see life savings quickly diminish and this is why it is important to understand different ways you can pay for long-term care.
Government Programs
Medicare – Federal
Medicare is a Federal Funded Program that can pay for Skilled Nursing Services. Skilled Nursing Services include wound care, intravenous (IV) therapy, injections, catheter care, physical therapy, occupational therapy, speech therapy and Room and Board. There is a 3-day hospital stay to qualify for Skilled Nursing Services. Skilled Nursing Services can be done at a Certified Skilled Nursing Facility. Medicare will pay for the first 20 days at no out-of-pocket expense to the individual. After day 20 the individual is responsible for coinsurance of $176.00 per day (2019). The individual may qualify for Skilled Nursing Services for up to 100 days.
Medicaid – State
Medicaid is a State Funded Program that can be used to pay for Long-term Care. Medicaid will pay for nursing home care only when it is “medically necessary.” “Medically necessary” or “medical necessity” is often defined as a nurse’s intervention, which are treatments or actions performed by a nurse. Individuals needing long-term care will be required to pay a co-payment (co-pay) using the formula below. Keep in mind the formula is an estimate and may not reflect the actual amount that the individual is required to pay. The facility will determine the co-payment amount be running a Medicaid Eligibility and Service Authorization Verification (MESAV) on a government website. Keep in mind that the facility does not determine the co-payment amount, but instead the state of Texas determines the amount of co-payment.
Nursing Home | Assisted Living |
Monthly Income minus $60.00* = Co Payment | Monthly Income minus $85.00* = Co Payment |
*Personal Needs Allowance or PNA
Monthly income can come in the form of Social Security, Supplemental Security Income, pensions, IRA withdrawals, and stock dividends. The $60.00 or $85.00 remaining can be used is a Personal Needs Allowance for the individual. All other bills that the individual may be paying will need to be settled before coming into a long-term care setting. But as you can see this co-payment will vary depending on the individuals monthly incoming. The facility will bill the State of Texas for the remaining amount. As you can see from Out-of-pocket expenses long-term care is a significant amount.
There are some exceptions to the co-payment amount. For example, if there is a living spouse living in the community there is a good chance that there will be zero co-payment required from the individual. This is known as Spousal Impoverishment. But again, the facility will need to run a MESAV to determine the correct co-payment amount.
If you do not have Medicare or Medicaid, please continue to read the sections below.
Qualifying for Medicare
In general, all persons 65 years of age or older who have been a legal resident of the United States for at least five years, have worked or their spouse has worked for at least 40 quarters (10 years) in the US are eligible for Medicare. However, for people under the age of 65 with disabilities, they may qualify for Medicare under special circumstances.
Qualifying for Medicaid – Texas
There are a few requirements needed for Medicaid for nursing home care. Other than the age requirement of 65 or older qualifying for Medicaid in Texas is related to income and resources. Basically, in order to qualify for Medicaid, you have to have little or no money. Using the chart below determine if the individual(s) will meet the monthly income requirements for Medicaid in Texas.
| Single | Married (Both Applying) | Married (One applying) |
Monthly Income Limit 2020 | $2,349 | $4,698 | $2,349 |
Now let’s talk about resources, individuals not married cannot have more than $2,000 in resources. If the individual is married and only one spouse needs nursing home care resources cannot be more than $3,000.
Resources include:
- Checking Account
- Savings Account
- Certificate of Deposits
- Other liquid assets
Resources not considered:
- Homestead with no more than $585,000 equity
- One vehicle, regardless of value
- Life insurance policy less than $1,500 cash value
- Burial Plot
Qualifying for Medicare or Medicaid can be a daunting task. If you have any additional questions, please do not hesitate to contact Mountain Villa at 915-566-2111.