Government benefits programs all seem to have one thing in common: they’re confusing. Medicare is certainly no exception, particularly as it relates to coverage for nursing home costs.
There are two different government programs that can potentially pay for nursing home costs, which are fundamentally different but easily confused because Congress, in its great wisdom, chose to give them confusingly similar names: Medicare and Medicaid. So similar are those names that even “seasoned professionals” like social workers, nursing home staff, medical personnel, and, yes, even elder law attorneys, sometimes say the one when they mean the other.
Here are the most fundamental general differences between Medicare and Medicaid:
- Medicare in an insurance program; Medicaid is a welfare program.
- Medicare coverage extends pretty much automatically to everyone age 65 or older; Medicaid is available only to those who qualify and apply.
- Eligibility for Medicare does not depend on how much assets or income a person has; eligibility for Medicaid is “means-tested,” and depends directly on those things.
- Medicare is strictly a federal program and the rules are the same everywhere in the United States: Medicaid is a combined federal and state program, and the rules vary from state to state.
There are also some important fundamental differences between the two programs with regard to the coverage each may provide for nursing home costs. The most important of those differences are as follows:
- Medicare pays only for “skilled care”; Medicaid also pays for “custodial care”.
- Medicare pays only for short-term care; Medicaid pays for long-term care.
- Medicare requires a prior hospital stay; Medicaid does not.
The Conditions for Availability of Medicare Nursing Home Coverage
In order for Medicare’s nursing home coverage to become available, four conditions must all be met. First, a person must have first had a hospital stay of at least three days’ duration. Second, nursing home placement must occur within thirty days of the hospital stay. Third, a physician must certify that the person needs skilled nursing home care. And fourth, the care needed must, as a practical matter, be available only in a skilled nursing facility on an inpatient basis.
By knowing these rules, a family considering nursing home placement for a family member can increase the chances of Medicare coverage being available.
For example, it is not uncommon for elders with an increasing need for assistance to suffer falls. In many cases, a serious fall, while not necessarily requiring hospitalization, can provide a valid basis for it. Other medical conditions the elder is experiencing may also justify hospitalization. If nursing home placement is contemplated, it is worth asking the elder’s attending doctor whether an initial hospitalization may be appropriate.
Similarly, if a hospitalization has occurred and the hospital’s social worker mentions possible nursing home placement as part of the discharge plan, it may be advantageous for the family to consider following that recommendation, rather than making an attempt, often based more on hope than reality, to continue caring for the elder at home. Once the elder remains home for more than 30 days following a hospital stay, the opportunity for Medicare coverage upon entering a nursing home is lost.
While the full scope of “skilled care” is somewhat more broad, in the great majority of cases it involves one or more of three types of rehabilitative care (“rehab” for short): physical, occupational or speech therapy. That leads to another important question the family should ask in determining whether Medicare coverage will be available: if placed in a nursing home, will the elder be initially receiving rehab or other skilled nursing care? If so, then some Medicare coverage will be available.
Those considerations are important not only for providing some initial financial relief in the case of a projected long-term stay, but also with regard to a short-term stay. It is often the case that the primary caregiver is running very low on energy. The elder’s rehab stay in a nursing home can often provide a welcome respite for the caregiver before the elder returns home.
The Scope of and Limitations on Medicare Nursing Home Coverage
When Medicare coverage is available for nursing home care, it pays for essentially all of the services generally available in a skilled nursing facility, including nursing care, room and board costs, therapy, medications, supplies, equipment, and other services necessary for the patient to attain or maintain the highest practicable level of functioning. About the only things not covered are “convenience” items such as telephone or cable TV service.
There are three critical limitations on Medicare coverage for nursing home care: the duration of the coverage, the co-payment requirement, and the “skilled care” requirement.
Medicare Part A provides coverage for nursing home care for a maximum of 100 days per spell of illness. For days 1 through 20, it provides “first dollar” coverage; for days 21 through 100, there is a co-pay requirement which changes annually. For 2012, it is $144.50 per day. In other words, if the elder is in a nursing home that costs $140.00 per day and does not incur extra charges Medicare covers, Medicare will not pay any of the cost beyond day 20.
The “skilled care” requirement is the source of much confusion. It, rather than the 100-day maximum, is what most often limits Medicare nursing home coverage. Under Medicare rules, rehab or other skilled care is only prescribed for a short time, and then the doctor must reevaluate the need to continue it. After the patient “plateaus” or otherwise achieves as much benefit as the skilled care will provide, Medicare will no longer pay. Thus, while the maximum number of “Medicare days” is 100, the average is only between 25 and 30.
There is perhaps room for a little bit of family advocacy relative to the skilled care requirement. If family members keep careful track of any progress the elder is continuing to show, and points it out (in very favorable terms, of course) to the doctor and therapist, it may influence the decision to continue rehab for an extra week or two.
What Medicare Supplement Insurance Does and Doesn’t Cover
Medicare supplement insurance, also known as Medigap insurance, is available to seniors who choose to enroll upon becoming eligible for Medicare. It covers most of the Medicare deductibles and co-payment amounts that the insured would otherwise be required to pay out-of-pocket. The extent to which it does so depends on which plan the insured chooses. Plans are identified alphabetically, with coverage increasing by letter of the alphabet (an “A” plan would provide the least coverage). Not all plans are available in all states.
A Medicare supplement policy under Plan F or above covers the co-payment amount for days 21 through 100 of a nursing home stay covered by Medicare. Thus, for someone who was eligible for the maximum 100 “Medicare days” in 2012, such a plan would provide a nursing home benefit of $11,560.00 which the insured would otherwise have had to pay personally.
The limit on Medicare supplement coverage is easy to understand. If Medicare coverage does not apply, then neither does Medicare supplement coverage. Thus, if rehab or other skilled care ends after, say, 28 days, then Medicare supplement coverage ends, just as Medicare coverage does. And a Medicare supplement policy never provides coverage beyond the first 100 days of a nursing home stay.
In some instances, people who want to avoid the extra expense of a Medicare supplement insurance policy elect a Medicare “Part C” plan, sometimes otherwise known as a “Medicare Complete” or “Medicare Advantage” plan. Such a plan is an HMO (or similar structure) that a Medicare-eligible person can elect in lieu of the coverage they would otherwise have under Medicare Parts A and B. Depending on what plan is chosen, there may or may not be a premium in addition to the Medicare Part B premium that is automatically deducted from Social Security payments. Because these plans vary in terms of what they cover, someone who is enrolled in one needs to ask specifically what nursing home coverage is provided. It is not safe to assume that these plans will cover the days 21-100 deductible in the same way that a typical Medicare supplement policy. Generally speaking, you get what you pay for.