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Medicaid’s Role in Covering Nursing Home Costs

Nurse helping senior with cane

Navigating the high costs of healthcare, especially for nursing home care, can be daunting. With the national annual median cost for a private room in a nursing home reaching a staggering $102,200, many find themselves searching for a financial lifeline. Medicaid often becomes that vital support.

“Nursing homes are among the most expensive levels of care, and most people simply don’t have that kind of money set aside,” explains Amie Clark, a seasoned expert in the field of senior care. As a co-founder and senior editor of The Senior List, and with a rich background as a long-term care ombudsman and geriatric care manager, Clark knows the ins and outs of the system. “For many, Medicaid is not just an option; it’s a necessity,” she adds.

Medicaid, a federal program with state-level authority, steps in to offer a helping hand, particularly through what’s known as Institutional Medicaid. This branch of Medicaid covers comprehensive services in nursing homes and other long-term care facilities, ensuring that residents receive the total care they require. These facilities, closely monitored and regulated, provide a wide range of services from room and board to medical and rehabilitative services.

One of the crucial distinctions to understand is the difference between Medicaid and Medicare coverage in these settings. While Medicare might cover some skilled nursing facility care for up to 100 days per benefit period, Medicaid is there to pick up the tab when Medicare’s coverage ceases, or if the patient’s needs exceed what Medicare provides.

Nurse smiling with senior

However, qualifying for Institutional Medicaid involves meeting specific health and financial criteria. States have the autonomy to set these requirements, which typically involve assessments of one’s ability to perform daily activities and adhere to income and asset limits. Some states even offer a spend-down program to help individuals qualify by deducting certain medical expenses from their income.

Applying for Institutional Medicaid requires a comprehensive look at both your and your spouse’s finances. Fortunately, certain provisions allow you to set aside income and assets for your spouse without affecting your eligibility. And while Medicaid does have a look-back period of up to five years to examine asset transfers, owning a home doesn’t automatically disqualify you. However, it’s wise to consult with an elder law attorney to understand how your home equity may affect your eligibility and coverage.

It’s also essential to debunk a common myth surrounding Medicaid: the quality of care is not compromised for those on Medicaid. “The care providers often don’t know the source of payment, so the quality of care you receive shouldn’t differ,” Clark reassures. “Once you’re in the system, the focus is on providing the care you need, regardless of how it’s being paid for.”

Navigating Medicaid’s coverage for nursing home care can be complex, but understanding its role and provisions can alleviate much of the financial burden associated with long-term care.