How to Pay For Nursing Home Costs

Medicare, Medicaid, and other resources can help minimize the cost of long-term care.

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Before applying for Medicaid, seniors who own their home also need to consider the fate of the property. Under federal law, a home is exempt from the asset limits described above, but if the owner dies while receiving Medicaid nursing home benefits, the government can take the house. Families that want to avoid losing a treasured home, therefore, might choose to forgo Medicaid, especially if the applicant's life expectancy is short and relatives have the means to pay anticipated costs out of pocket.

A senior may be able to keep his or her home in the family either by adding a child's name to the deed at least five years before applying for Medicaid, or by setting up an asset-protection trust before applying. This type of trust enables a person or couple to transfer some type of property, such as a home or cash-like assets, to another person to hold and manage for their benefit, says Gabriel Heiser, a Nashville-based lawyer specializing in nursing home law and author of How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets. "This is not a do-it-yourself project, however," he says. He recommends hiring a lawyer to help with the process.

One way to find a qualified lawyer is to call your local bar association and find out which attorneys are teaching seminars on Medicaid planning to other attorneys. The attorney also must be licensed in the same state as the person needing Medicaid assistance because Medicaid laws vary from state to state. The National Academy of Elder Law Attorneys has an online search tool that can help consumers locate a lawyer near them.

[View Infographic: A Guide to Nursing Home Costs.]

Veterans Administration Aid and Attendance
This benefit program provides up to $1,733 per month to a single veteran who needs nursing home care, or up to $1,114 per month for the care of a veteran's surviving spouse. If a couple includes one spouse who is a veteran and either of them needs a nursing home, they are eligible for as much as $2,054 in monthly assistance. Two veterans married to each other could qualify for up to $2,676 per month.

Negotiating Long-Term Care Costs
Most nursing homes won't lower their rates, which are keyed to the payment levels offered by Medicare and Medicaid. Still, there's sometimes room to negotiate when it comes to long-term care costs. "Sometimes, rather than accept a lower Medicaid rate, a facility will agree to take a lower private pay rate, which is still higher than the Medicaid rate but lower than published private pay rates," says Howard Krooks, president-elect of the National Academy of Elder Law Attorneys. By contrast, assisted living facilities, which don't take Medicare or Medicaid, and home health agencies often face steep competition, so consumers shouldn't be shy about talking prices with these organizations. An assisted living facility with a high vacancy rate or no waiting list may be more willing to negotiate a monthly rate, according to Genworth. If you're considering a home health agency, you may be able to secure a lower hourly or daily rate if you indicate that you're shopping around for the best price.

Relocating the Patient
If a senior who needs long-term care has children, grandchildren, or other relatives residing in a city or state where nursing homes are less expensive, moving the patient could be a good option, Krooks says. A move might not only reduce the cost of care but also make it easier for relatives to check in on the resident. Those deciding whether to move an elderly relative should consider the individual's health and whether moving away from doctors who have an established relationship with the senior could harm his or her care.

Moving an elderly relative to a new location solely to find cheaper care might backfire if it leaves the patient far from family. Relatives could face higher travel expenses when visiting their loved one, offsetting any family savings.

[Read: 6 Decisions to Make Before You Die.]


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