average cost of a nursing home in some metropolitan
areas is $20,000 per month.
Any person over the age of 65 who is eligible to
receive Social Security is also entitled to
Medicare. Currently, Medicare pays for up to 150
days of hospital care and, in certain circumstances
for up to 100 days in a skilled nursing facility.
But the Medicare deductibles--the total
"out-of-pocket" expenses not covered by Medicare if
a patient receives the full 250 days of coverage--is
still nearly $30,000. Most seniors are shocked to
learn this but often shrug it off in the belief that
they are adequately protected by the supplemental
insurance policies they own.
Most available private insurance policies pay the
Medicare deductible amounts but very few cover
beyond that. In addition, existing supplemental
insurance policies seldom cover two types of care
very likely to be needed: custodial nursing home
care and home health aides. These services are
covered by Medicaid once a person's life savings
have been almost totally depleted.
Generally, to receive Medicaid a person must be
"categorically eligible," that is he or she must be
poor enough to receive Supplemental Security
Insurance (SSI)States have the option of extending
coverage to the aged, blind and disabled as well.
Some states, such as New York, also offer coverage
to a class called "medically needy," those being
people whose monthly income exceeds the SSI
allowance (currently about $438 per month) but whose
medical bills nevertheless exceed their income.
Recipients must "spend down" their assets and
excess income on medical bills in order to qualify
for Medicaid. In other words, you lose your lifetime
of assets you have accumulated, in order to get the
necessary means of footing your nursing home bill.
In order to be eligible for Medicaid in New York,
a single individual may have no more than $3,000 of
"exempt" resources (cash equivalents and other
assets) plus an additional $1,500 as a burial fund.
A single individual living at home is also entitled
to a mere $500 per month of income. How much money a
married couple may keep depends upon circumstances.
When a couple is separated by reason of the
institutionalization of one, the spouse remaining in
the community is entitled to keep $66,480 plus up to
$1,662 of monthly income. But a husband and wife
living together at home may have only $4,300 of
liquid assets plus $1,500 each as a burial fund. In
addition, as a couple, they may keep $717 of
combined monthly income. It makes no logical sense
that a couple may keep less than a single spouse
continuing to reside in the community while the
second is in a nursing home, but this is only one of
the inconsistencies in the new law.
The resource and income allowances are indexed
for inflation and will, presumably, increase in
future years. Again, allowances vary from state to
state. In New Jersey, for example, a single
individual is only allowed to have $2,000 plus a
$1,500 burial fund, and the monthly income permitted
is $1,221 for a nursing home resident, $438.25 for a
single person living at home, and $635.36 for a
couple living together. Where a nursing home patient
has a spouse living at home, the community spouse is
entitled to keep between $12,500 and $62,500 of the
combined marital assets.
In addition to the dollar amounts above, certain
other assets are exempt from being counted for
Medicaid eligibility purposes. Among them is a
"homestead." This homestead can be the primary
residence of either the Medicaid applicant, his or
her spouse, or members of their family including
certain children and other dependent relatives. A
house unoccupied by one of the above (i.e., an
investment property or vacation home) or even the
primary residence, once vacated because the elderly
occupant is institutionalized, may not be exempt. It
may need to be sold to pay for medical bills.