Medicaid Nursing Home Funding

Medicaid has differing areas that it covers. A lot of attention goes to low income Medicaid users. We sometimes forget that almost 20 percent (one-fifth) of all Medicaid dollars go to pay for nursing home care for elderly patients.

Approximately 70 percent of older Americans will spend some time in a nursing facility. Many individuals do not understand the payment systems that exist.

Medicare will provide some coverage. However, it has some strict guidelines. The most important rule is that you need to have a three day hospital stay before you can qualify for payment to stay in a skilled nursing facility (this differs from a nursing home setting). A one or two day stay will often see Medicare deny the stay at the skilled nursing facility. Many patients are unaware of this.

The next thing that many people do not realize is that when Medicare does pay for care after that three day stay, the payments are limited. They will usually cover the first 20 days at a skilled nursing facility completely. Days 21 to 100 are only partially covered with co-pays needed. After day 100, the patient becomes responsible for payment. Those longer stays will more likely occur in traditional nursing home settings.

The average nursing home stay in the United States is 13.7 months. That means after day 100 individuals can expect to pay for about 10 more months of care. They may need to pay from their savings for the care. Or they may need to use Medicaid.

Statistically, Medicaid is the primary payor for 63 percent of nursing home residents. So even though only 20 percent of Medicaid funds go to nursing homes, 63 percent of the individuals in the nursing homes use Medicaid for payment.

The future of Medicaid is now in question. If there are cuts to payments to nursing homes, there will be a domino effect.

As of 2019, Medicaid only covered about 82 percent of nursing home costs. That percent is likely to decrease in the future. It might lead to the closure of facilities.

It will certainly lead to staffing shortages. Salaries will not be competitive. For that reason, care will wind up suffering.

In-home services are often paid for by Medicaid. It is possible that these will decrease. If that happens, then there will be a need for more people to move to a nursing home setting. However, there may not be enough beds for that to happen.

We need to take the entire picture into account when we look at Medicaid funding. Seniors are very dependent upon it when it comes to nursing home care.