When a loved one needs care at home or in a facility, there may be help paying for costs of care.
As a general matter, there are five ways to pay for the cost of care. These are:
Each of these is summarized below. You can browse our site for more information and details, and check the answers to frequently asked questions.
Medicare will help to pay for hospital bills and doctor bills under Parts A and B, as well as drug prescriptions under Medicare Part D. Rehabilitation in nursing home is also covered by Medicare Part A but only in limited situations and only for a brief period of time. Generally you must first have a three-day hospital stay, followed by rehabilitation for skilled nursing care in the nursing home. Traditional Medicare then will pay for the first 20 days of rehabilitation, and an additional 80 days of rehabilitation with a large daily deductible. That deductible is what your supplemental health care insurance may help to pay. (Note that Medicare advantage plans will have different benefits for rehabilitation than traditional Medicare Part A.)
When you stop rehabilitating, Medicare stops. And if Medicare stops then your supplemental insurance will stop too. You then either must leave the facility or find a different way to pay for the cost of care. There are appeal rights to continue Medicare coverage for rehabilitation but the overall time limits still will apply.
For more information about the Medicare rules you can visit http://www.medicare.gov/coverage/skilled-nursing-facility-care.html,
With nursing home costs often $7,000 per month or more, using your own funds to cover the cost of care may or may not be an option for your particular situation. Using private resources means using your own savings and investments to cover the cost of the nursing home. If you have long-term care insurance, be sure to start the process to begin receiving your benefits. You also may have life insurance with a long-term care rider that can help to cover the cost of care.
A life care settlement from a large existing life insurance policy can help too. Before cashing in your life insurance policy that has a face value of $50,000 or more, you should consult with an advisor to consider whether you could sell the policy to get more than its cash value to help pay the costs of care (whether you’re in the nursing home, at home or in assisted living). This can also apply for term life insurance and group policies even though those have no cash value at all.
Veterans with a service connected disability (who suffered a disability in the military and receive a monthly compensation check) should contact the VA for VA health care and nursing services. Veterans who have no service connected disability but served on active duty during a wartime period may also have benefits, primarily “aid and attendance” also known as “veterans pension.”
Aid and Attendance provide cash payments to the veteran, or to the spouse of a deceased veteran based upon the veteran’s income and assets. To qualify, the veteran must have served at least one day of active duty during a wartime period, and at least 90 days of active duty altogether. There as asset limitations, and so someone with too many assets will not qualify. There are also income restrictions, but the income restrictions generally can be met by someone who is receiving care in assisted living or a nursing home, or who has other sizeable care costs that are not reimbursed by insurance.
The amount paid by the VA pension depends on your situation. For more information about VA Pension and Aid and Attendance, click here.
Most people who are in the nursing home will need some assistance to pay for the devastating costs of nursing home care. North Carolina Medicaid is available for both nursing homes and assisted living. However, the programs for the two levels of care, and it is important to understand that Medicaid is not always an option for assisted living care, or for memory care (such as someone with alzheimer’s in a memory care facility).
Married couple when one spouse is in the nursing home
In general, if you’re married and your spouse will need to stay in the nursing home for more than a brief time, you should explore Medicaid to avoid spending half of your retirement savings or more needlessly. That’s because the North Carolina Medicaid rules generally will allow a healthy spouse to protect nearly all of the couple’s assets and qualify the ill spouse (in the nursing home) for Medicaid to get the nursing home care needed. However, the Medicaid Office won’t tell you that, and instead will tell you to spend down at least half of your assets before you apply. That’s because it’s not the job of the Medicaid Office to tell you how to protect your assets. Be sure to get the right help, and don’t delay.
By taking the right steps, at the right time and in the right order, generally the health spouse at home can keep nearly all of the combined assets, and all of his or her own income (Social Security, pension and investment income from the assets). The ill spouse’s income (for the spouse in the nursing home) will be used to pay for the cost of care. The spouse at home may at some point also be entitled to a portion of the institutionalized spouse’s income. For more details about how to apply for and receive Medicaid for a spouse in the nursing home, click here.
Single person (widow or widower)
For a single person, Medicaid will cover the cost of a nursing home stay but only if the individual’s countable assets are $2,000 or less. Generally all assets are assets are countable, other than these: the person’s house; one car; up to $10,000 of life insurance; prepaid funeral; and household goods.
Don’t simply spend your assets down to $2,000 before applying, although that is what you’ll likely hear from the Medicaid Office and from well-meaning people at the nursing home or friends and neighbors. The problem with spend all assets before qualifying for Medicaid is that not only will you not have any money, the nursing home must be paid all of your monthly income except for $30/month that you get to keep. You will be living on less than $1 per day! There’s not much dignity at a dollar per day, and you won’t be able to pay for things that Medicaid doesn’t cover such as clothing, haircuts, visits away from the nursing home, or restaurant food.
With the right action after entering a nursing home, a single person usually will have to spend about half of their funds on care. But they won’t have to spend everything! And in some situations, there may be actions to take to protect more assets. By making sure that the person doesn’t spend everything, they will have funds available to supplement the $30/month that Medicaid allows them to keep, and doing it in a way that follows the Medicaid rules that is honest, legal and ethical.
Assisted Living in North Carolina
Medicaid for assisted living in North Carolina is a state program called “Special Assistance.” The rules are similar as Medicaid for for nursing home care, but there are some significant differences. In North Carolina, Special Assistance and not nursing home Medicaid will apply to regular assisted living, as well as for memory care at the assisted living facility. (Please note, it’s quite common for people to call both of these benefits “Medicaid.” Quite often assisted living communities will refer to Special Assistance as Medicaid, even though it is a separate program with separate rules.)
There is a lot of confusion and misunderstanding about Special Assistance, and how it helps for assisted living and memory care. Here are three main differences to know, as follows:
- Not all assisted living facilities accept Special Assistance. On the other hand, nearly all nursing homes accept Medicaid; there are Medicaid beds all nursing homes (other than some continuing care retirement communities that are entirely private pay). Be sure to find out whether the particular facility accepts Special Assistance.
- Even if the facility accepts Special Assistance, you might never qualify. That’s because unlike nursing home Medicaid, there is an income cap for qualification for Assisted Living. The income cap is provided here. As you will see, there is a higher income cap for memory care than for regular assisted living. However, if you’re even a dollar over the income cap, you will never qualify for Assisted Living even if you have no assets at all. That comes as a real shock to many people, who thought that Medicaid could help in assisted living. For those people, they will either need to get their care from family at home, or qualify for VA Aid and Attendance, or justify a higher level of care needed and move to a nursing home. Unfortunately, some people can’t do any of those and fall through the cracks of the North Carolina laws and have a very difficult time getting and paying for care.