Along with getting good quality of care for the nursing home resident, the major concern is how to pay for it when it costs $6,600 or more a month. There are, essentially, just four ways to cope with such astronomical costs:
1. Long Term Care Insurance - If you are fortunate enough to have this type of coverage, it may go a long way toward paying the cost of the nursing home. Unfortunately, long term care insurance has only started to become somewhat popular in the last few years and most people facing a nursing home stay do not have this coverage. Even if the nursing home resident has long term care insurance, it may not pay the full cost of the nursing home bill. In that case, you will still need to apply your income, use your savings, or qualify for Medicaid.
2. Pay with Your Own Funds - This is the method many people are required to use at first. Quite simply, it means paying for the cost of a nursing home out of your own pocket. Unfortunately, with nursing home bills averaging $220 a day or $6,600 per month in the metropolitan Detroit area of Michigan, few people can afford a long term stay in a nursing home.
3. Medicare - This is the national health insurance program primarily for people 65 years of age and older, certain younger disabled people, and people with kidney failure. Medicare provides short term assistance with nursing home costs, but only if you meet the strict qualification rules, which are described on this site.
4. Medicaid - This is a federal and state funded and state administered medical benefit program which can pay for the cost of the nursing home if certain asset and income tests are met.
Since the first two methods of private pay (i.e. using your own funds) and long term care insurance are self-explanatory, our discussion will concentrate on Medicare and Medicaid in future posts.