Paying for Residential Care Options

Once the elder and family accept the painful reality that residential care is necessary, the next logical question is how to pay for what is needed.  Talking money in the same breath as highly emotional issues seems callous, but costs and payment options actually must be discussed early in the process in order to make sound, informed decisions.

First thoughts generally run the gamut from “Doesn’t Medicare pay for that?” to “If I spend all my money, what will I do next?” to “We don’t have the money, so what do we do?” In truth there is both good and bad news, but there is more of the former than the latter.  And, like going to the doctor, once you begin the discussion and get it over with, you can take positive action instead of fearing the unknown and spinning your wheels.

Medicare --  Contrary to popular belief, Medicare does not cover all health care needs for the elderly.  Medicare covers “acute care” only.  Medicare A covers hospitalizations and up to 100 days of nursing home care (rehabilitation) and/or home care following a “qualifying” hospital stay of three or more days.  Medicare pays the first 20 days in full and a portion of the remaining 80 days.  “Up to 100 days” means that coverage continues throughout the period if and only if the patient continues to need, participate in, and achieve goals while in rehabilitation.  Medicare B covers doctor visits and procedures, and Medicare D covers prescription drugs.

HMO or Gap Insurance --  Many elders have health insurance under a senior plan with one of the large insurance companies like Blue Cross Blue Shield, Harvard or Tufts.  You do not have an HMO instead of Medicare, the HMO manages Medicare benefits and provides “gap” coverage for expenses not covered by Medicare.  HMOs cover only medical expenses, they do not cover residential fees (room and board) associated with long term care expenses.  When individuals convert to Medicaid, they can generally drop HMO coverage.

Medicaid (MassHealth) --  More Medicaid dollars are spent annually on long term care coverage for the elderly than Medicare dollars.  For qualifying low income elders who have spent down their resources, Medicaid covers in part or in full: hospital costs, medical visits and co-pays, medical procedures, durable equipment, vision and hearing services, and medical transportation.  For those eligible, Medicaid also covers home health care, adult day health, long term nursing home care, assisted living and rest home care.  Because there are many different plans and programs under Medicaid, it is best to seek information from a qualified benefits source.

Assisted Living Benefits --  Low income elders in Massachusetts who could not otherwise afford assisted living may be able to do so under the Medicaid sponsored GAFC program.  This program uses Medicaid money to pay the difference between an eligible elder’s monthly income and the monthly residence fees.  Not all assisted living facilities offer GAFC, while others have a very limited number of GAFC beds.  Elders must meet stringent income guidelines in order to qualify, and GAFC recipients generally receive a shared rather than a private apartment.

Rest Home, Retirement Home or Residential Care Benefits --  Low income elders who could not otherwise afford such homes may be able to do so under one of two programs: 1) For very low income elders who qualify for SSI, any home that has provider status can bill Medicaid for the difference between the elder’s income and the home’s state-set reimbursement rate.  2) Low income elders who are ineligible for SSI may qualify for EAEDC funding to make up the difference between their income and the home’s state-set rate by applying to the local Division of Transitional Assistance.  Income and asset requirements are very stringent and not all homes accept SSI & Medicaid or EAEDC.

Long Term Care Insurance --  Many people carry long term care insurance and many more find that it does not cover as much as they had hoped or had been led to believe.  Review such policies carefully with a company representative or benefits consultant to determine whether home care or assisted living is covered and to determine how much the company pays toward nursing home care.

Points to Keep in Mind --  1) Medicare is an age-based program while Medicaid is income-based.  2) Medicare is a federal program while Medicaid is a state program; consequently, Medicare benefits are the same across the country whereas Medicaid benefits vary from state to state.  3) When calling about Medicaid (MassHealth) in Massachusetts, it is important to ask for the “Over 65 Program.” 4) Eligible elders who qualify for both Medicare and Medicaid are termed “duly eligible,” and that term needs to be given to each and every health care provider whenever insurance or billing information is requested.  5) Facilities don’t always provide complete, comprehensive benefit/payment information, and not all facilities assist with the benefit application process.

Benefits Information -- Because calling Medicare, Medicaid or any government agency can be a lengthy and confusing ordeal, two web sites, www.benefitscheckup.org and www.govbenefits.org, are highly recommended.  In Massachusetts you can contact the Serving Health Information Needs of Elders (SHINE) program for free benefits information and assistance at (800-243-4636); or contact the Senior Center or Council on Aging (COA) in your community or your regional ASAP (Elder Services Agency) to either request information or to arrange to meet with a SHINE consultant.