Many people assume that it is primarily Medicare that provides the funds for nursing home care, since Medicare is a program specifically for the elderly, and the overwhelming majority of people who receive nursing home care are seniors.
But in fact, very little nursing home care is covered by Medicare. Medicare only provides 100% coverage for a maximum of 20 days in a nursing home, and partial coverage for a maximum of 100 days. Furthermore, it’s not as if everyone receives coverage for even those numbers of days, for there are additional restrictions, including that one must be in the nursing home temporarily to recover following hospitalization, with the expectation of returning to living independently. If a medical professional cannot document that the person is making such progress toward recovering sufficiently to leave the nursing home, then Medicare will not pay even for this limited amount of nursing home care.
Since so many nursing home residents are people whose condition has deteriorated to where they need the level of care provided in a nursing home environment, with little or no hope of reversal, it is the exception rather than the rule that Medicare will cover much if any of the expenses. So many seniors find themselves turning instead to Medicaid.
Medicaid is a government program to help poor people pay for medical care. It is funded jointly by the federal and state governments, and administered largely by the states. Thus one can speak only in general terms about Medicaid and its eligibility requirements, as in effect Medicaid is fifty different programs. For more specific information, it is recommended that you consult the state agency that administers the Medicaid program where you live. (See: Links to state Medicaid program websites.)
Medicaid is the safety net for the poor, including the many who become poor precisely because they’ve run out of assets late in life as they’ve had to pay for things like nursing home care. For Medicaid’s purpose is not to step in to prevent people from becoming poor; it is to make sure those who are or become poor are not left without medical care.
In general terms, in order to be eligible to have Medicaid pay for nursing home care, your income and assets must be under a certain (very low) level, which most states determine as a percentage of the federal poverty line.
When a person applies for Medicaid, a case worker will be assigned to their case to investigate their financial status to see if they are eligible. If a person is not eligible, they may later become eligible after, as mentioned above, they spend more of their assets on their care.
Some people attempt to get around the requirements by simply giving away their assets, perhaps to those they intend to will their property to after they die anyway. You can do this, but understand that Medicaid looks at your most recent five years of financial transactions. If you give away your assets at the last minute to try to become eligible for Medicaid, you’re looking at a wait of five years or close to it to become eligible. Whereas if you gave away your assets sooner, then you would have less, if any, of a wait.
For people who are married and own a home, if one spouse goes into a nursing home and the other remains living independently, they can keep the home they own jointly and not have it count as an asset for the purpose of determining Medicaid eligibility.
One other important point worth mentioning: Not only does the individual have to be eligible for Medicaid, but the nursing home facility itself must be certified by Medicaid. So if you are intending to have Medicaid pay all or part of nursing home care, be sure to only use a Medicaid certified facility.
Marian Anne Eure, “What Does it Take to Qualify for Medicaid Status in Nursing Homes?” About.com.
“A Guide to Nursing Homes.” Helpguide.org.
“Medicaid Eligibility: Overview.” U.S. Department of Health & Human Services.