The divergence in costs between facilities can be dramatic
By Mike Takieddine
Nursing homes are expensive by any measures, although costs vary considerably depending on location, type of accommodations, the level of care needed and, naturally, by the metric of luxury.
In 2014, the average daily rate for a semi-private room was $212 ($240 for a private room), with the lowest average rate at $94 ($104 for privacy), and the highest at $800 (or $954).
Because the majority of nursing homes also comprise “skilled nursing and therapy” sections for the rehabilitation of post-surgery patients, the rates charged by each nursing home also depend on the level of skill and reputation of these sections.
At another level, studies point to this variance in costs also relating to the availability and costs of proficient health care workers in surrounding areas. Also a factor is the basic supply and demand for beds in and around adjacent towns, and demand for the skilled nursing care provided by each facility, since many rehab patients also remain at the facility after rehabbing.
What is included in those rates?
Nursing homes typically charge a basic monthly fee, although the services provided in those fees again vary considerably from one facility to the other.
Typically, the monthly rate includes room and board, skilled nursing care and medication management services. Additional costs may include medication, special nutritional needs, laundry, hair care, nail care, lab costs, special outings, transportation, and other services and benefits that might be considered as add-ons.
Specialized dementia care may also be an additional cost. When demand is high in your particular area, facilities establish a waiting list, and they may ask you to put up a deposit for private care patients.
Does Medicare reimburse for any of this?
Medicare does not reimburse for long term care, although it does pay for typical post-surgery skilled nursing services. There are a number of circumstances and conditions that must be met to be Medicare-eligible. These include a recent hospitalization of at least three consecutive days, a physician’s certification to the effect that in-patient skilled care is required and, in addition, the skilled care facility providing care must be Medicare- certified.
Consumers are often surprised that Medicare has a deductible to be met, even after you have met all of its requirements. Medicare covers all of the charges only for the initial 20 days of skilled nursing care. You must then meet your annual deductible for coverage of days 21 through 100.
As you can tell, Medicare (and Medicaid as well) have complex systems for qualifying patients and, simply put, you would be well advised to seek assistance in determining the full extent of your rights.
The story is different with Medicaid
Medicaid is a federal and state program that does pay for nursing home care for eligible individuals. Rules for eligibility vary, but all states require spending down your assets to a predetermined limit (a net worth of $4,000 or thereabouts, depending on the state). Some people enter skilled nursing homes paying privately until their funds are depleted to the acceptable levels. They then become eligible for Medicaid coverage for the remainder of their life. However, not all skilled nursing home facilities accept Medicaid, so if you will need to choose a Medicaid-certified facility.
Long Term Care (LTC) Insurance
If you require skilled nursing care but haven’t had the three-night hospitalization requirement of Medicare, you will typically have to pay with private funds. Given the aforementioned cost of a bed in a nursing home, this expense can quickly deplete your savings. Due to this risk, many consumers have taken advantage of purchasing long term care insurance policies.
LTC insurance covers personal care, be that at a long term facility or with home health aides at home.
Insurers (Metlife, Allianz, GE, John Hancock and hundreds others) have extensive menus of programs with cutoff limits, e.g. $20/day for a home health aide for 180 days, or $3,300/month at an Assisted Living Facility for so many months or years. Naturally, the more they pay per day, and the longer their coverage durations, the higher the monthly premium. The biggest variable in determining the cost of LTC insurance however remains the age of the policy holder-to-be. For people in their 70’s and 80’s, many families would find that cost on the prohibitive side.
As the aging population grows in the United States, and due to the ever expanding prevalence of chronic diseases, the demand for skilled nursing care keeps rising. The best approach for people with aging parents is therefore to be well planned ahead of events that trigger awkward transitions, such as a bad fall, a nasty pneumonia or, worse, a stroke or heart attack.
Allheal is a Conroe-based Medicare-certified home health agency with a Private Duty Division that provides in-home elder care services to clients up and down the I-45 corridor north of Houston.