How to Pay for Residential Care
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For many people, finding a way to pay for residential care is a major
concern. Typically, there are four ways in which these costs are financed:
1. Personal Resources-About one-half of all residents pay for costs
out of personal resources. When many people enter a nursing home or
other care facility, they pay for their care out of their own income
and savings. Because of the high cost of such care, however, some people
deplete their resources and apply for Medicaid.
2. Private Insurance-Some Medicare supplementary insurance policies,
often referred to as "Medigap" insurance, also provide a source
of payment for residential care. Private, long-term care insurance also
is available.
3. Medicaid-State and federal coverage is available to eligible low-income
individuals who need care above the level of room and board.
4. Medicare-Under some limited circumstances, Medicare hospital insurance
(Part A) will pay for a fixed period of skilled nursing home care. The
nursing home must be Medicare-certified.
Many health maintenance organizations (HMOs) and other coordinated
care plans participate in the Medicare and Medicaid programs. These
plans often cover certain benefits in addition to those supplied by
Medicare and Medicaid and are experienced in "coordinating"
a member's health care. Some HMOs also offer more medical or supportive
services; others may not require a hospital stay before approving nursing
home admission.
If a loved one is enrolled in a health maintenance organization (HMO)
or competitive medical plan (CMP), ask a representative of the plan
about coordination of health care services between the HMO/CMP and the
residential care facility. Find out which facilities the HMO or health
plan works with in the area. If you're interested in a facility outside
of the area served by your loved one's HMO, discuss this with the plan's
representatives.
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