Hot Topics in Health Care: Nursing Home Costs
We have all purchased the US News & World Report magazine for the best colleges, graduate schools and professional schools issue or just thumbed through it at the bookstore. Well in February, you will be able to pick up the Best Nursing Homes issue, which will offer a rating of almost all of the 16 thousand – plus nursing facilities in the U.S. In anticipation, I thought I would devote a column to talking about the high cost of nursing homes and payment options.
There are approximately 3 million residents living in nursing homes. The average cost of a nursing home is $222 per day or $81,000 yearly. In New York, many nursing homes cost between $450 to $600 per day or $165,000 to $219,000 plus on an annual basis. The average length of stay for a non-rehabilitation stay is 2 years, but that is just an average, it is common for individuals to live many years in a nursing home.
The obvious next question is who pays. There are five main sources of payment: Long Term Care Insurance, Private Pay, Medicare, Commercial Insurance and Medicaid. Long-Term Care Insurance (LTCI) and Private Payment is great and gives the individual maximum choice as to which facility they would like to reside in, but LTCI is limited as to how much per day and the maximum amount of the benefit. With Private Pay, even very wealthy individuals will find themselves quickly diminishing their assets. Contrary to popular belief, Medicare only has a limited nursing home benefit, covering only 20 days at 100%, only after a 3 night Hospital stay qualifier and the maximum benefit is 100 days (the next 80 days) per spell of illness. Commercial Insurance usually only pays a very limited amount of time, usually similar to what Medicare pays. Overwhelmingly, Medicaid is the go to payer for Nursing Home stays. However, Medicaid, which pays the complete nursing home bill, as long as one qualifies, has strict income and asset guidelines.
The best advice that I can provide is to have this discussion with your spouses, children and loved ones very early on. The earlier you tackle this issue, the more choice and less cost you will incur. There are many strategies, including special Medicaid Trusts, Promissory Notes, transfers and other legally acceptable approaches, which you should seek competent legal assistance prior to making any decisions.
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- Michael LaMagna, LNHA, MPA, JD concentrates in the areas of Medicaid and Advanced Asset Protection Planning, Elder Law, Trusts and Estates, Probate and Probate Litigation, Guardianships, Health Care Regulatory Matters, Nursing Home Placement, Long Term Care Insurance, Medicare Appeals, Social Security/SSI Litigation and Special Needs Law. If you have a question for Mr. LaMagna, please call him at (914) 437-5955.