Medicare Coverage: Senior Home Health Care & Nursing Home Coverage

Fran Majidi
September 6, 2019

Some people embark on their retirement years in great health so they don’t fuss over the details of their health insurance for their later years. They’ll have Medicare, they figure, so they can rest easy if something goes wrong with their health.

But what about down the road, when you may become home-ridden or need nursing home care? Medicare doesn’t cover it all. You need to start looking more closely at your health insurance options sooner rather than later, especially when it comes to home health care for seniors.

Figuring out how much care you need as a senior is confusing, so is figuring out how to pay for it. You may have Medicare and are considering Medigap or Medicare Advantage to pay for out-of-pocket expenses. Keep in mind that it’s illegal for an insurance company to sell you both Medigap and Medicare Advantage, mainly because the coverages would overlap. You have the option to buy one or the other. Medicare Advantage Health Plan is Medicare Part C and may end up being even cheaper than having Medicare plus Medigap, which is your other option. It’s best to compare rates first by comparing Medicare quotes.

There are no caps on out-of-pocket expenses for medical procedures with original Medicare. So for an emergency heart surgery, let’s say $100,000, you may owe almost $20,000 in copays. There’s also the predicament seniors fall into when their Medicare prescription-drug coverage ends (at $3,750 and begins again at $5,000). During that gap, patients are responsible for 25% of their brand-name prescription drugs. As you can imagine, this is why some people who turn to private insurers who offer Medicare Advantage Health Plans as an alternative to Medicare. Or, they buy Medigap for the gaps in coverage with original Medicare.

But what about home health care. What’s covered and what’s not?

Does Medicare Cover Nursing Home Care?

People often assume that Medicare takes care of all types of senior healthcare. For instance, they think a stay in a nursing home is covered but it gets more complicated. Both long-term nursing care and indefinite residence in a nursing home are not covered by Medicare.

With Medicare, you’re qualified for care in a Skilled Nursing Facility (SNF) if you’ve been in the hospital for 3 days and still need care. Your Medicare Part A would, however, require a deductible, just under $1400, for the first 20 days of your stay. From days 21-100, you’d pay $167.50 per day out of pocket. After that period of time, there is no more coverage for a long-term facility stay and it’s all your personal expense.

Does Medigap Cover Nursing Home Care?

Just as with Medicare, if you buy Medigap (from an agent) you’re covered by Medigap when you transfer to a nursing home only if you meet the 3-day minimum hospital stay. Only then would Medigap begin to cover your deductible and your coinsurance, if you need to stay more than 20 days but less than 100 days ($167.50 per day). Medigap will not cover you beyond 100 days. There is no coverage for indefinite nursing home stays.

Does Medicare Advantage Cover Nursing Home Care?

Medicare Advantage plans are not standardized so you’ll have to check each plan and policy to get clear details on what’s covered and what’s not. Generally speaking, Medicare Advantage partially covers your stay (often without the mandatory 3-day hospital stay) but you’ll be charged a daily coinsurance. Like Original Medicare (with or without Medigap), long term care in a nursing facility or an indefinite stay beyond 100 days is not covered.

Medicare Coverage: Custodial Care vs Skilled Care

In most instances, the way Medicare decides if it will or will not cover a service when it comes to long-term care. Custodial care requires no medical training. It includes bathing, dressing and moving from seated to standing and to bed. Skilled care requires medical training and can not be done by a family member. However, even skilled care given by a nurse in the home or in a facility is also subject to a copay.

Medicare Advantage Coverage: Custodial Care vs Skilled Care

Similar to Medicare Original, Medicare Advantage (MA) plans tend to cover only skilled care but these coverages are changing. Starting in 2019, MA plans offer healthcare benefits that reduce the need for health and emergency services. Benefits may include bathing, grooming, dressing, laundry and even light house cleaning. Some Medicare Advantage plans also cover assisted living facilities. What is and is not included varies greatly based on the state you live in and the plan you buy. Speak with a trusted agent to get the right plan for you by visiting here.

Home Health Care for Seniors: Medicare vs Medicare Advantage (MA)

With Medicare, home care is provided if it’s a medical problem and the individual is “confined,” meaning they cannot leave the home without assistance. Even then Medicare only pays for the doctor-prescribed medical at-home care on a part-time basis. Basically, these are services that will be deemed absolutely necessary by a medical provider.

Assisted living facilities are a mixed bag because they offer custodial care and medical care. Original Medicare and Medicare Advantage will pay for the medical services but not the cost of room and board. Medigap also won’t cover room and board.

Some Medicare Advantage plans offer supplemental healthcare benefits that Original Medicare does not, including respite care, meal delivery and transportation. While you want to go over exactly what your coverage will and will not pay for, you should speak with an agent after starting a quote.

For low-income seniors Medicaid will help with long-term care needs as per doctor prescriptions, including personal care assistance, companionship care, respite care, adult day care, meal delivery, nursing home care and more.

Long-Term Care: Home Health Care Insurance for Seniors

The reality is that long-term care outside of the home is expensive. A semi-private room in a nursing home is more than $200 a day (more than $7,600 a month); an assisted living facility costs just under $4000 a month on average and adult day care is about $70 a day on average. Hiring a home aide costs money: $20 on average. When you consider these numbers, the average annual cost of $45,000 a year with home care is not terrible.

If you aren’t eligible for Medicare or Medicaid, you can buy long-term care insurance which is regulated by the state and sold by an insurance agent. In fact most nursing homes and assisted living facilities do not accept Medicaid.

Over 100 companies in the U.S sell long-term care insurance policies. The best time to buy it is in your early 50s when you are in good health. That’s when you want to lock in a rate, before you develop a chronic disease or medical condition. Rates only increase by 1 to 2% a year in your 50s and increase annually by 6 to 8% once you reach your 60s. Note that a portion of your annual premium is tax deductible. The amount of the claim cannot be more than 10% of the insured’s adjusted gross income.

Short-term care insurance is a much more affordable option than long-term care insurance and usually caps out after one year. This is another alternative way to pay for senior citizen home health care, at least for an illness, from which the insurer is expected to recover.

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