How to Pay for Nursing Home Care

Thinking about paying for a nursing home, whether planning for a loved one or considering for your future self, can be daunting. The average cost of assistant living can be high, and knowing about private payment, Medicaid eligibility for nursing homes and other options can be confusing. 

Yet identifying what financing options are available to you is the first step to ensure you or your family member gets the appropriate care . Getting these plans in order means you and your family can rest easy, knowing that the future is taken care of. Thankfully, there are several different ways to pay for professional care — and some come at no cost, thanks to government benefits. 

There are a couple of ways to pay for nursing home care, including insurance and government assistance programs. Here’s what to know about paying for nursing home care and how you should think about planning for the future. To go over the spectrum of later life issues, like estate planning, with a professional, reach out to Farm Bureau. 

Paying for Nursing Home Care Through Insurance

Option #1: Life Insurance

Depending on the type of life insurance policy your loved one has, it may be possible for them to liquidate their policy early to gain access to funds that can help pay for care. One avenue to this option can come through a chronic illness benefit, such as Farm Bureau’s Daily Living Benefit Rider. In this situation, clients can accelerate a portion of their policy’s death benefit if they are unable to perform at least two of the six designated activities of daily living, or have severe cognitive impairment, as well as being chronically ill for at least 90 days and predicted to continue to be ill.*

It’s important to note this is available through an additional premium but is typically much lower than a standalone long-term care insurance (LTC) premium. And be aware that the amount of benefits taken from the life policy each year may be subject to taxation if it exceeds a certain amount in your state.

Option #2: Long-Term Care Insurance

Those who have long-term care insurance have usually selected this policy for the benefits it provides in covering the costs of care. This payout usually begins after a medical event triggers the need for care. Importantly, premiums must still be paid after that event, and they increase with the advancing age and/or the declining health of the individual.

Option #3: Self-Funded or Private Payment Options

Covering the cost of long-term care can be done out of pocket or through savings. This may be the most obvious way, but there are other means of self-financing a stay in a nursing home or at-home  health assistance. For instance, cash flow from pensions, retirement income or the sale of stocks and homes can all contribute to paying for a nursing home . Remember, nursing home care is quite expensive, and your assets may be depleted sooner than you expect.

Paying for Nursing Home Care Through Government Assistance Programs

Option #1: Medicaid

Medicaid is a federal and state program that provides coverage for low-income individuals. If your income or assets are greater than Medicaid’s limit, you will be unable to qualify. It’s possible to pay for care out of pocket until your personal assets and income are reduced and fall under Medicaid’s threshold, which then may allow you to qualify.

Option #2: Medicare

Medicare is a federal program that provides health coverage for those over the age of 65, or for those under the age of 65 with a disability, regardless of their level of income. This government program primarily covers short-term nursing home stays and can be used for those who need immediate care. 

Since Medicare is meant for rehabilitating patients, it covers the full cost of care for the first 20 days and pays a portion for days 21-100. Remember, Medicare has a narrow definition of skilled nursing care and provides limited benefits for care.

Option #3: VA Benefits

VA (Veterans Affairs) benefits are offered to senior veterans who need long-term care. The specific coverage is determined by each individual’s health needs. To be eligible for VA benefits, veterans need to sign up for VA healthcare and meet certain eligibility requirements.

Be Prepared

No matter which option you think is best for you and your loved one, we’re here to help. Reach out to Farm Bureau today to discuss your options.