The focus of this article is how to get a loved one into a nursing home that accepts Medicaid payments. Since the majority of persons in nursing homes for long term care utilize Medicaid to pay the bill, this article is relevant to most families. Given the average cost of nursing home care is over $225 per day, very few families can afford to pay out-of-pocket. We’ve published other relevant articles that readers may want to review prior to this one, specifically on Medicaid eligibility for nursing home care and how much Medicaid will pay for nursing home care.
One would think that getting a Medicaid-eligible, aging parent, spouse or other loved one into a nursing home would be a relatively easy process. However, due to the nuances of Medicaid acceptance and the complexities of nursing home law, it is not a simple, nor a fast process. Multiples issues can combine to make the process even more challenging such as the limited availability of “Medicaid beds” in nursing homes and the fact that most nursing homes will not accept a new resident unless they have a way to pay for their care and Medicaid will not accept the applicant until they have been admitted into a nursing home.
Fortunately, for most families, there are ways out of this paradox. There are 4 different paths families can use to get a loved one into a nursing home. However, which path to choose depends on the family’s specific situation. It is important set realistic expectations for the family. Getting a loved one into nursing home, long term care will take several months and will probably cost $3,000 – $6,000 (some of which may be refunded). The less time is takes, the more money it will probably cost. The process can be done without cost, but that may add several months to the duration.
If a family is uncertain whether their loved one is eligibility for Medicaid, one can take a fast, free and non-binding eligibility test here. Readers should be aware that “being Medicaid eligible” is not the same as being “approved for Medicaid”. Readers should also know that if a loved one is not financially eligible for Medicaid, but they still cannot afford nursing home care, all hope is not lost. Medicaid planning professionals are available to assist in these situations.
Multiple Paths to Getting into a Nursing Home
There are four ways a family can get a loved one into a nursing home. However, which of the four approaches to take depends on many different factors specific to the Medicaid beneficiary and their family such as:
- If they have Medicare
- If they have Medicaid already
- If the applicant or their family has short term cash available
- If they reside in a state or geographic area where nursing homes accept Medicaid pending clients
- If they are automatically eligible for Medicaid or whether they will need to “spend down” to eligibility
- The immediacy of the need for nursing home care
Prior to continuing, the reader should be aware that families are often trying to accomplish two goals at the same time. 1) Getting approved by Medicaid and 2) Getting into a nursing home that accepts Medicaid. Know that these two goals can be at odds with each other.
Regardless of the approach taken, a family should create a list of nursing homes that accept Medicaid in their area. Our organization provides a Medicaid Nursing Home Search Tool to help with this process.
1) Medicaid Pending Approach
This is a good approach for most families as it requires no output of cash or nor is the family always required to guarantee payment to the nursing home should their loved one be rejected by Medicaid. However, only a relatively small percentage of families can make the Medicaid Pending approach work. Recall that most nursing homes will not accept a resident unless they have a way to pay for their care and in most states, Medicaid will not accept the applicant until they have been admitted into a nursing home. Nursing homes that accept Medicaid pending residents are the exception to this rule. “Medicaid pending” means that applicant has applied for Medicaid or is in the process of doing so and waiting for a response from their state’s Medicaid office (which can take up to 90 days). To take this path, one simply has to find a nursing home in their preferred area that accepts Medicaid pending clients, move in, apply for Medicaid and the nursing home defers payment until the point where the applicant / resident gets approved for Medicaid and Medicaid makes payment.
Step 1 – Create a list of nursing homes in your area that accept Medicaid. One can do so here.
Step 2 – Contact admissions at each nursing home on your list and ask if they accept Medicaid pending clients.
Step 3 – If they accept Medicaid-pending, ask admissions if the nursing home has any “Medicaid beds” available. A nursing home may have 100 beds, but only 50 of which might be allocated to Medicaid beneficiaries. If they have Medicaid beds available, one should begin the move in process ASAP. If not, they should request to be put on the waiting list. As a wait-list does not require a financial commitment, therefore families should try to be put on as many wait-lists as they can find acceptable nursing homes.
Step 4 – Apply for Medicaid, but only if the family is certain the applicant will be approved. Do the research, take a Medicaid-eligibility pre-screen and then apply. If the applicant is denied Medicaid coverage, it is very likely they will be immediately evicted from the nursing home. If the family is not certain their loved one is eligible, contact a Medicaid planning professional.
There are three significant drawbacks to this approach. First, nursing homes that accept Medicaid pending residents without a guarantor of payment are few and far between. Second, the care quality ratings for these nursing homes tends to be lower. That is not to say all nursing homes that accept Medicaid pending residents provide less than average care, but their ratings on the whole are lower. Third, should an applicant be rejected by Medicaid, the resident will almost certainly be immediately evicted from the nursing home unless the family begins paying out-of-pocket.
2) Medicare Approach
Using Medicare to get into a Medicaid nursing home can work for persons who have not “used up” all their Medicare nursing home benefits. Medicare will pay for nursing home care (80% of the cost) for up to 100 days. If the Medicaid applicant 1) has Medicare and 2) has not used up their 100 days benefit, this approach may work. Candidates will need to find a nursing home that accepts both Medicare and Medicaid, contact them to determine if they have any “Medicaid beds” available, if so, move in and immediately apply for Medicaid. Medicaid is supposed to approve / deny applicants within 90 days of receiving a completed application (however this is not always the case).
Should the applicant not be approved during the 100-day window, the nursing home may evict the applicant. 100 days is a very short window in which to determine if someone is Medicaid eligible, prepare the application and all the accompanying paperwork and receive approval. Working with a Medicaid planner may speed up this process, but most Medicaid planners require payment out-of-pocket. Another major drawback is that the nursing home may try to make the candidate or their family members financially responsible for payment should the candidate be denied Medicaid approval. Medicaid denial is a very real possibility even for people who believe they are eligible, and families could be burdened with many thousand dollars of nursing home expenses.
3) Private Pay During Spend Down Approach
This is probably the most common approach to entering a nursing home. Medicaid has a “countable asset” limit for eligibility. Persons whose countable assets exceed the Medicaid limits must spend down their assets on nursing home care (or on other qualified expenses) until their countable assets no longer exceed Medicaid’s asset limit. For example, most states have a Medicaid asset limit for a single person of $2,000. If an individual has $15,000 in countable assets, they must spend down or pay for their own nursing home care for about two months until they have only $2,000 remaining. (An alternative to spending down on nursing care, is to work with a Medicaid planner). Entering a nursing home on “private pay” (spending one’s own money out-of-pocket) is much easier than entering with Medicaid as the payer. Once the resident has entered the nursing home, they can easily switch to Medicaid as the payer when they become Medicaid-eligible.
There are several things of which to be aware when taking this approach. First, you must select a nursing home that accepts Medicaid payments so that when the resident switches from private pay to Medicaid, they are not required to find a new nursing home. Second, the resident or their family needs to carefully time the Medicaid application process. Too early and they will be rejected for having too much money, too late and they might run out of money before they become enrolled in Medicaid. Fortunately, many states facilitate this timing by allowing for a conditional acceptance into Medicaid with a structured spend-down of assets.
The big drawback of the spend-down approach is having to spend one’s own money on their care when the alternative might be to work with a Medicaid planner and preserve that money for other family members such as a spouse or grown children who have been caring for their parent.
4) Family Private Pay During Spend Down Approach
This approach is similar to #3 and is typically used when #1, #2 and #3 are not available options. Because it can often be difficult for a person to find a nursing home that accepts Medicaid and to time one’s entrance with Medicaid approval, families sometimes spend their own money to pay for their loved one’s nursing home care while they are applying and waiting for acceptance into the Medicaid program. “Private pay” or spending out of pocket makes entrance into the nursing home much easier. Many nursing homes will refund what the family has spent on nursing home care when the applicant is approved for Medicaid. Medicaid can be approved retroactively to the date of admission into the nursing home. In these cases, Medicaid pays the nursing home for the beneficiary’s care and the nursing home refunds to the family what they have spent.
There are three important keys to making this approach work. First is to find a nursing home that accepts both private pay and Medicaid as payers. By doing so, this will prevent the loved one from having to switch nursing homes when they become Medicaid eligible. Second, the family must communicate with the nursing home in advance of move-in that the resident is applying for Medicaid and that they expect the nursing home to refund their payments when Medicaid funding kicks in. The family must get this agreement in writing from the nursing home. Third, the Medicaid application must be made for retroactive Medicaid. In some states, retroactive Medicaid may be automatic, but in other states one must specifically request this option.
The big drawback to this approach is if something goes wrong in the Medicaid application process. If so, the family will not be refunded the money they spent. Because this approach has many moving parts and because significant financial resources are at risk, families may want to consider working with a Medicaid planning professional to ensure the process goes as planned.
Regardless of the approach on which a family decides, there are certain steps they should take as soon as possible.
1) Determine if the individual entering a nursing home is Medicaid eligibility. Start here.
2) Create a list of Medicaid nursing homes in your geographic area. Start here.
3) Obtain a Nursing Home Referral from the individual’s doctor.