When you look to the future, it is impossible to predict whether you or your loved one will need long-term care for your facility. But another major unknown for many is whether the insurance carried by them or their loved ones actually covers the nursing home.
Nursing facilities are long-term residential facilities suitable for seniors who need 24-hour medical assistance, but they do cost a lot. According to the latest Genworth Cost of Care Survey, the national median national for nursing home semi-worm rooms in 2023 was $8,669 a month or $104,028 a year. And while the exact amount varies from state to state, the cost of care at a nursing home is high no matter where you live.
Does insurance cover nursing homes?
If you're wondering which nursing homes will pay for insurance, the simple answer to this complicated question will vary depending on the…
Health insurance and Medicare are not covered, according to Brian Burns, president and CEO of Blakeford Seniors, who lives in Nashville, Tennessee.
Room and board. Auxiliary services (e.g. radiology/diagnostic imaging and lab testing). Supplementary supplies (such as lab kits and medical devices).
Private long-term care insurance may provide some benefits to long-term care residents, but coverage varies by company and insurance.
Understanding different types of care
Medicare and ultimate cost insurance agent Travis Price advises that it is important to understand the differences in types of care before further researching your insurance.
Storage care. Care that supports daily activities such as eating, drinking, dressing up, and bathing. This is the type of care that is usually seen in nursing homes.
Skilled care. Care that is inpatient rehabilitation or nursing, such as intense physical therapy or occupational therapy, wound care, or other specialized treatments.
Key differences: skilled medical care, such as registered nurses, respiratory therapists, physical therapists, speech-language pathologists, etc., must be given by a licensed healthcare professional.
“People were initially able to enter skilled nursing care for rehabilitation, for example, stroke patients,” explains Price. “However, in the end, there may be cases where continuous long-term personal care is needed that requires nursing homes due to lack of progress or improvement.”
Types of health insurance and what they cover
Depending on your insurance company, you or your loved one may have different nursing home insurance benefits. A brief summary:
Medicaid
This federal program provides nursing homes or custody to eligible low-income individuals. “Medicaid covers 100% of nursing home costs up to daily limits,” says Price. “Daily restricted eligibility will vary depending on the state and plan.”
Unlike subsidized facilities, nursing homes cost a flat per day and are comprehensive in services.
Medicare
This federal program provides medical benefits to individuals over the age of 65 or under the age of 65 who are eligible for disability benefits, with A, B, and D.
Medicare Part A. This will benefit in inpatient care or primary care. Examples include staying in a hospital or skilled nursing facility.
Medicare part B. This brings medical benefits to outpatient care. Examples include doctor visits, physician/occurrence/speaking therapy, durable medical devices, and annual flu vaccine shots.
Medicare Part D This has advantages to drugs and prescription medications.
Medicare Part C. This plan involves Medicare parts A/b/d in one plan. “This offers similar benefits to traditional Medicare parts A/b/d, and could even offer the advantage that traditional Medicare parts A/B do not cover,” says Barnes. “Be very careful about the monthly premiums and actual cost of care for Medicare Part C, as these plans often have very low premiums, but can cause significant out-of-pocket costs if you need to use Medicare Part C benefits.”
“Be very careful about the monthly premiums and actual cost of care for Medicare Part C, as these plans often have very low premiums, but can cause significant out-of-pocket costs if you need to use Medicare Part C benefits.”
– Bryan Burns, President and CEO, Blakeford Senior Living
Medicare does not cover long-term management care such as nursing homes. But “we can cover skilled nursing facilities after a qualifying hospitalization,” says Price. “If you have inpatient hospitalization for at least three days, skilled nursing care falls under Part A and the doctor points out that it is medically necessary.”
Private Health Insurance
These types of plans typically offer benefits to services that Medicare permits or covers, but are not fully paid by Medicare. Burns explains that the example could be a Medicare part-timer. There are skilled nursing coinsurances at $185.00 per day, or 20% of treatment fees under Medicare Part B, but private insurance coverage varies widely depending on the insurance company plan. Also, you will not normally pay long-term care benefits.
Does long-term care insurance cover nursing homes?
These policies can offer perks for services and items that are not covered by Medicare or health insurance. “This is the right type of insurance for those who want to cover custody care in nursing homes, home health or adult day care,” says Price. “The plan is customized by needs, and the biggest customizable items are the exclusion period and daily profit amount.”
Here is an example of how Long-Term Care Insurance (LTC) works depending on the price: Jane needs custody in a nursing home and has a long-term care policy with a 60-day exclusion period, $400 profit and a $400 limit.
Jane (or her Guardian/Conservator) will pay from the pocket for the first 60 days. After 60 days, the policy will refund up to $400 a day of daily expenses until $400,000 is exhausted. Once, or if the benefits limits are exhausted, Jane will start paying again.
Long-term care insurance is required
If you are shopping for long-term care insurance, consider the following protein tips:
LTC Premium is primarily customized. They are based on age, gender, health status and length of exclusion at the time of application. “Women pay more than men, and older people pay more than younger people,” Price says. “In addition, LTC plans can increase premiums with age.” Look at partnership plans. Price suggests seeing whether the state offers a “partnership plan,” an incentive from Medicaid to enroll in long-term care insurance. “In these states, you can maintain the assets you normally have to spend to qualify for Medicaid,” he says. Think about hybrid term life insurance plans that offer LTC riders. “It essentially works in the same way as an LTC insurance plan, but the pool of money is the face value of the policy (for example, $100,000),” he says. “This policy pays approximately 1-4% of the monthly face value if you have to enter long-term care after the exclusion period, up to face value.”
“Women pay more than men, older people pay more than younger people. Furthermore, LTC plans can increase premiums and often increase with age.”
– Travis Price, Medicare, Final Cost Insurance Agent
Mike Hogan, Life Insurance Specialist and Management Manager at PolicyGenius, explains that long-term care riders will cover nursing home fees if older people are unable to perform at least two of the six activities due to daily life (ADL). These include:
eat. bathing. Wear clothes. walk. Relieves body fluids. Maintaining the bladder.
“If these requirements are met, payments will be taken from the policy's death benefit and close between 70-80%, which can be used in nursing homes,” he says. “There are also period life insurance that offers life benefits riders, which provides additional protection if you are diagnosed with a chronic or serious illness after ensuring coverage.”
Ultimately, when it comes to paying for nursing care with insurance, clarity around all options can help you identify the right path.
