This is because nursing home care is known to be a more expensive senior living option. Hence, it is crucial to determine how much it costs and make a financial plan.
To help you with this process, we will guide you through how to pay for your nursing home care.
Medicare and Medicaid
Only if you require professional or rehabilitative care within 100 days in a nursing home, a brief time of skilled home care or other trained in-home services, or both, will Medicare cover long-term care.
Only individuals who meet the requirements of their state’s program are eligible for Medicaid. Your modified adjusted gross income determines your financial eligibility based on the federal poverty threshold.
The government examines your finances going back five years to see if any assets transferred during that period exclude you from receiving benefits.
Veterans who need long-term medical care can get it through the U.S. Department of Veterans Affairs. The VA may fund the cost of nursing homes for seniors depending on their specific healthcare needs. Veterans and their spouses must already be enrolled in VA health care and meet qualifying standards based on their income, level of disability, and place of residence. Know more about how to secure nursing home payments through the VA here.
Private Pay Options
In addition to state and federal programs, many families pay for nursing homes using personal resources. Consider the following options:
According to the National Institute on Aging, elders typically pay for nursing home care out of their own pockets or with personal resources.
A pension is a regular payment made by a retiree’s previous employer. Pension payouts are determined by retirement age, job, and several years of employment.
Social Security benefits, annuities, retirement or profit-sharing plans, insurance agreements, or IRAs are all examples of retirement income. Frequently, retirement income is taxable. Consult an accountant about possible tax credits and breaks for paying for nursing home care with retirement income.
You can sell your stock holdings to pay for nursing home care. Consult the portfolio advisor for your loved one to decide what to do.
It’s typical to sell a home to pay for elder care. According to a National Association of Realtors survey, more than half of all home sellers in 2019 and 2020 were over the age of 55.
If an elderly loved one hasn’t saved money or planned anything to pay for nursing home care, the obligation is usually passed on to family members. Financial discussions can be challenging, particularly when several family members contribute to the cost of a nursing facility. Plan beforehand to avoid sibling arguments.
These swiftly available, short-term loans might be utilized to cover the cost of a move to a nursing home or skilled nursing facility while assets are being sold or liquidated.
These three types of insurance can help seniors fund care:
Long-Term Care Insurance
You may be eligible to receive money to pay for nursing home care expenses if your relative purchased long-term care insurance. Custodial care is the category that most nursing facilities fall under, and long-term care insurance is made to cover both custodial and personal care. Plan-specific benefits and policies, however, differ.
Long-term care insurance may be available at subsidized group rates for federal employees, uniformed service members, retirees, their wives, and other qualified family members. Learn more information about long-term care insurance for federal employees.
One option to pay for a nursing home is financing long-term care using life insurance. Seniors can sell their life insurance policy to a third party at market value or surrender it at cash value (the total of all their premium payments).
Private Health Insurance
Depending on the policy, some private insurance policies will pay for the cost of medical care in a nursing home.
Ask the sales director of the facility you are considering if it is possible to separate the expense of personal care from medical care, which includes providing medication, physical therapy, and injections, as well as activities, feeding plans, and housekeeping. The former may be covered by health insurance.
If you find navigating the details of paying for long-term care challenging, speaking with a financial professional may be helpful to you.
Check out Investor.gov to find information about finding, choosing, and working with a financial professional.
For more information or if you have any concerns about paying for care, you may also check out the following resources:
|Resource||Contacts||Email / Website|
|Eldercare Locatorfirstname.lastname@example.org |
|Medicare Centers for Medicare and Medicaid Services||800-633-4227 (1-800-MEDICARE)|
|Social Security Administration||800-772-1213800-325-0778 (TTY)||www.ssa.gov|
|SHIP (State Health Insurance Assistance Programs)||email@example.com|
|Department of Veterans Affairs||877-222-8387||www.va.gov/geriatrics|
|National Council on Aging (NCOA)Benefits.gov|
|Program of All-Inclusive Care for the Elderly (PACE)||800-633-4227||Medicare’s PACE|
As you get older, it’s normal to worry about how you and your family will pay for your care in the future. When moving into a nursing facility, preparation ensures you have more influence over your medical care and quality of life. Additionally, it lessens the financial strain on your family.