Payment Sources and Coverage

Unique coverage plans for different types of care

Long-Term Care

  1. Medicare: A Federal government program providing coverage for individuals who are over age 65 or are permanently disabled. Medicare coverage and definitions are very complex and the information here is only intended to provide an overview of services covered. Specific detailed information should be confirmed through Medicare or your healthcare provider. Medicare does not pay for any long-term, custodial care in any setting.

Medicare coverage is broken out in several parts that include:

Part A: This pays for inpatient care in hospitals and for short-term skilled nursing rehabilitation services in nursing homes. Part A also covers skilled home care and hospice care. Medicare pays for skilled care in a nursing home for up to 100 days after a 3-day qualifying stay in an acute care hospital. It does not pay for any long-term or custodial care.

Part B: Medicare Part B pays for office visits to the doctor, diagnostic tests, durable medical equipment, certain mental health services and outpatient therapeutic services, such as physical and occupational therapy. In long-term care settings, Part B can pay for physical, occupational and speech therapy when needed, even if a resident has not been hospitalized.

Part C: Medicare Part C is not really a separate coverage area, but is the terminology used to refer to the Medicare policy that allows recipients to select Medicare Advantage plans. Individuals with Medicare Advantage plans can receive skilled nursing home care as part of their benefits, but those benefits must be authorized by their specific insurance plan.

Part D: Medicare Part D is the Medicare outpatient prescription drug benefit. This benefit can help pay for prescription drugs when a Medicare recipient is living in a long-term care setting such as a nursing home or assisted living.

  1. Medicaid: Medicaid is a joint federal and state program that pays for the care of individuals who have exhausted their personal savings and financial assets and cannot pay for their own care. Because of the high cost of nursing home care, many individuals needing long-term nursing home care exhaust their personal savings and, as a result, qualify for Medicaid. Medicaid pays for more than one-half of residents living long-term in nursing homes. The federal government requires states to include long-term custodial nursing home care as a basic Medicaid benefit. Individuals must qualify both medically and financially to be eligible for Medicaid in a nursing facility.
  2. Private Payment: Refers to payment for services from an individual’s or family’s personal assets, savings or income.
  3. Commercial or Private Insurance: Insurance companies such as Anthem Blue Cross, Harvard Pilgrim or United/AARP may pay for either short-term skilled care in a nursing home setting utilized by individuals under age 65, or for portions of care not covered by Medicare, such as deductibles and co-payments. Commercial insurers also pay for coverage of skilled care for individuals who have opted out of original Medicare and are members of a commercial Medicare Advantage plan. Coverage requires pre-approval by the insurance company at the time of, or prior to admission.
  4. Long-Term Care Insurance: There are a number of private commercial insurance companies that offer specific insurance policies to cover long-term care services. These plans are designed to help pay for long-term nursing home or assisted living care and some also pay for home care. LTC insurance plans usually pay only a specified amount per day for care, and the duration of the insurance covered is usually specified as 1, 2 or 3 years.
  5. Veterans Benefits: Qualified veterans may be eligible to receive certain long-term care benefits, either directly from the Veterans Administration or through coverage to help pay for services from private providers. Specific information should be sought from the Veterans Administration.

Short-Term Skilled Care

Medicare Part A can cover up to 100 days of skilled nursing care in a licensed skilled nursing center, providing you had a qualifying 3-day inpatient hospital stay and the skilled services you receive in the nursing home are related to that hospitalization. Skilled nursing services include rehabilitative services under the definition.

Please Note the Following:

  1. The length of Part A coverage is determined by the provider, and the services must be certified by the attending physician. It is also important to note that the 3-day inpatient qualifying hospital stay does not include time in the hospital that the hospital classifies as an observation stay. This is a critical issue, as many patients may receive care in a hospital emergency department and are transferred to an inpatient medical floor and part or all of that care may be classified as an observation stay, NOT inpatient stay.
  2. If you qualify for Part A, then Medicare will pay all costs for the skilled nursing home stay for the first 20 days. Beginning on day 21 of a skilled stay, you will be responsible for a co-payment for the remainder of your stay (up to 100 days).
  3. If your stay extends to 21 or more days and a co-payment is necessary, many commercial insurance Medicare Supplemental policies (“Medigap” policies) will cover some or all of the co-payment charges. If a patient does not have such co-payment coverage, but they qualify for Medicaid, then Medicaid may pay for the co-payment. If an individual does not have insurance or Medicaid coverage for the co-payment, they will be directly responsible for the co-payment. The daily co-payment rate is set by the federal government and changes each January.

Medicare Advantage Plan Coverage

Individuals who have selected a Medicare Advantage plan in place of traditional Medicare coverage will have similar coverage as described above.

Commercial or Employer-Sponsored Insurance Coverage

Commercial insurance plans vary widely in what services they cover. Many plans do provide some coverage for short-term/post-acute care in a skilled nursing center; you should verify coverage with your insurance plan.