One misconception many people have is the idea that, if they need to go into a nursing home, Medicare will cover those expenses. This is only partially true. Medicare provides some coverage for nursing home care, but that coverage is very limited.
If you have Medicare Part A coverage, you’ll be entitled to in-patient skilled nursing care, but only if you’ve been hospitalized for at least three days first. And your coverage is capped at 100 days. Of these 100 days, the total cost of your care is covered only for the first 20. For days 21-100, Medicare will pay 80% of your bill.
If you need care for longer than this period of time – a reality for many people – you’ll have to find other ways to pay for your care. The common options are:
- Use long-term care insurance to cover your expenses, assuming you’ve purchased and maintained a policy.
- Pay for your care out-of-pocket, using savings or the assistance of loved ones.
- If you qualify for Medicaid, this program will pick up much of the tab for your care.
If you fail to plan for your long-term care needs, you could find yourself in a bind. Long-term care insurance may be a good option, depending on your finances and certain other factors, but it needs to be purchased well ahead of time. Paying nursing home costs completely out-of-pocket is an option that only a few of us have.
And this leaves Medicaid as the many peoples’ best choice for nursing home coverage. However, since Medicaid is a need-based program, you’ll have to be below certain thresholds when it comes to income and assets before you can qualify. Simply giving away your property at the last minute in an attempt to qualify is not an option – this can disqualify you from receiving Medicaid benefits for an extended period of time. There are steps you can take that may help you qualify for benefits, but those steps have to be in compliance with very specific rules.
The best way to make sure that your nursing home costs will be taken care of is to start planning far in advance. Your estate planning attorney is a good source of information about the pros and cons of purchasing long-term care insurance, as well as the specifics of Medicaid planning.
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