As Alzheimer’s and dementia progress from mild to severe, so do the severity of your loved one’s symptoms. As symptoms change, the ability to stay in one’s home can become unsafe and outside resources are needed. Normally, at this point, families look into nursing homes to aid in long-term care. This is an important decision that has also become very expensive. The cost of nursing home care is around $100,000 per year and varies greatly from state to state. This makes preparing and planning for how to pay for nursing home care an important process.
Before talking about nursing homes, dementia, or Alzheimer’s care, let’s be clear about what nursing home care is and is not. Some things to be clear about are:
– Nursing homes are not the same as assisted living.
– Assisted living specifically for people with dementia is called memory care. Assisted living or memory care, provides less care than a nursing home and has different regulations.
– Skilled nursing facilities is another phrase that is sometimes used with nursing homes but is not always accurate in interchanging those terms. Skilled nursing facilities are intended for short-term care, rehabilitation, or recovery from injury.
– Nursing homes provide long-term care on an ongoing basis. They are intended for patients who cannot live in their houses but do not need hospital-level care.
– Memory care patients live in a more home-like environment. This is a good option for patients with mild to moderate symptoms of Alzheimer´s or dementia.
To be admitted to a nursing home, one must require a nursing home level of care. The definition can vary in each state but it is important to remember a diagnosis of Alzheimer’s or dementia does not automatically make one eligible. Most people who are in the early stages of dementia will not require nursing home-level care and not will not be eligible. Many patients in the middle stages of dementia will be eligible and all patients with late-stage dementia should be eligible.
Most states require nursing home residents to need assistance performing 2 to 3 activities of daily living (ADLs). This means that they need help with functions of everyday life like bathing, eating, or getting dressed. From a medical perspective, mid and late-stage dementia patients are eligible because they can not function and live independently.
Finances are always an important aspect of nursing home eligibility. Some nursing homes have no financial criteria for admission. These are referred to as “private pay”. This means that the resident pays for the complete cost of their care. The majority of Americans with dementia rely on Medicaid and cannot afford to privately pay for their care. Medicaid has benefits that pay for nursing home care and their eligibility criteria can be exceedingly complicated with different rules in each state.
Medicaid requires applicants to be nearly impoverished to be financially eligible depending on the program they are applying for. In 2023, a single applicant must make less than $2,742 in monthly income and have less than $2,000 in countable assets. However, there are many exceptions to these rules and some states offer even more accommodations for those with dementia. See state specific Medicaid eligibility criteria. Learn more about how to qualify for Medicaid.
Medicaid is broken down into programs:
– Institutional Medicaid. This can also be referred to as nursing home Medicaid, which has nationwide coverage. This means that if someone is eligible for Medicaid, the state must pay for their nursing home care.
HCBS Medicaid Waivers
– Home and Community-Based Services are most commonly provided via Medicaid Waivers, often referred to as 1915(c) Waivers. HCBS can be provided in a variety of settings, including at home and in memory care residences. Medicaid Waivers are not an entitlement. This means eligibility does not guarantee benefits because there may be a limited number of waivers. A person with dementia can be eligible for the program but may be placed on a waitlist for services. Waitlists in some states can be several years long, although that would be an extreme case. Also worth mentioning: some Medicaid waivers target a specific group of people, such as those with Alzheimer’s disease or related dementia.
– Aged, Blind, and Disabled (ABD) Medicaid. HCBS are also available in some states through their Aged, Blind, and Disabled Medicaid program, also known as regular Medicaid. Generally, the services offered are more limited than through Medicaid waivers. Unlike Medicaid waivers, home and community-based services through the ABD Medicaid program are an entitlement. Meeting the requirements for state Medicaid means the state must cover HCBS services for a dementia applicant and there are no waitlists. Generally, a state’s regular Medicaid program has more restrictive financial eligibility requirements than HCBS Waivers.
In 2022, the average cost of a private room in a nursing home in the US was $9,305 per month. Nursing home care costs do not change for people with dementia in comparison to those without the disease. Unlike assisted living or memory care, the cost of care in a nursing home does not rise based on the amount of care required by the resident.
The cost of nursing home care does vary dramatically by state. In Alaska, care can cost as much as $32,000 monthly while the least expensive state is Missouri averaging $6,000 per month. See nursing home costs by state and region.
There are very few financial assistance programs designed to help pay for nursing home care for people with dementia. Instead, most assistance programs are designed to help individuals avoid placement in a nursing home. It is important to point out that the benefits of the following 3 programs pay for the vast majority of nursing home costs for patients with dementia.
Medicare’s nursing home benefits for people with dementia are limited. A Go here for a full explanation of Medicare’s benefits. With regards to nursing home care specifically, Medicare’s benefits are limited to 100 days. They are not intended for long-term or ongoing care. For the 100 days of coverage, Medicare only pays part of the cost. From day 1 to day 20, there is coverage with a zero copay. From day 21 to 100, there is a copay of $200 per day in 2023. For those requiring nursing home care, Medicare’s benefit is just to offer a window of opportunity to apply for Medicaid which can cover nursing home care in the long term.
While primarily thought of for medical care, some of the personal care required for loved ones with Alzheimer’s disease and related dementias is covered by Medicare. Care needs change as the disease progressed and there are Medicare benefits can be targeted to help pay for these particular needs.
For people who are both financially and medically eligible, Medicaid will pay for all their nursing home costs. This includes your loved one’s care plus room and board. A diagnosis of dementia does not mean that a person is medically eligible for Medicaid. Remember that someone with dementia who requires nursing home care would be medically eligible. Financial eligibility criteria are very restrictive and complex and are discussed in more detail by clicking here. Unless married, they must surrender all their monthly income to Medicaid, except for approximately $20 to $100. In return, Medicaid will pay for the complete cost of their nursing home care for as long as they require it.
Medicaid is health insurance for low-income Americans of all ages. Recipients of Medicaid must have monthly income and countable assets (including money in bank accounts) below a certain amount. The income limit is often $2,742 per month in 2023, and the asset limit is usually $2,000. These numbers can differ depending on the state, however, because Medicaid is managed at the state level and therefore varies depending on where one resides.
Medicaid is often confused with Medicare, but they are very different. Medicare is health insurance for all Americans aged 65+, regardless of their income. Medicare is managed at the federal level, so it’s the same for all recipients regardless of their state of residence. Medicare covers medical needs like doctor visits, diagnostic tests, hospitalization, and medications; Medicaid, unlike Medicare, pays for many long-term non-medical services and supports that persons with Alzheimer’s or other dementias require.
Many people who eventually obtain assistance from Medicaid are not immediately eligible because of their finances. Instead, they go through a process called Medicaid planning. That means they work with a financial planning professional to help them gain eligibility and preserve enough income and assets for their immediate family members or their spouse. Working with a Medicaid planner can ensure family members maintain enough resources to continue living independently.
For veterans with Alzheimer’s or other forms of dementia, the VA Health Care system offers assistance. Dementia does not need to be related to one’s military service. Proving a connection would be difficult. The long-term care benefits offered by the VA depend on several factors. These variables include the level of disability, income, and service-connected status. The VA has both state veterans’ homes and contracts with private nursing homes that provide care for veterans.
Additionally, there is an extra cash payment for beneficiaries of Aid & Assistance. In some states, you cannot receive VA Pension and Medicaid benefits at the same time.
Placing a loved one with dementia in a nursing home seems like it should be a relatively straightforward process. Still, like everything associated with dementia, it is harder than it should be. While there is a medical need assessment during the admission process, that assessment is more to determine how the nursing home will be able to serve the candidate’s needs. It is less about whether their needs are severe enough to require admission to a nursing home.
The more challenging component of a nursing home admission is how the nursing home ensures they will receive payment. All nursing homes will investigate how they will be paid before admitting a resident. If a resident intends to pay out-of-pocket, admission will be easier, but very few nursing home residents with dementia intend to pay out-of-pocket for the long term. Patients could require care for years and the cost is approximately $100,000 per year, most individuals will eventually turn to Medicaid to help pay for their care. This is where the complexity of admission begins. People who intend to use Medicaid tend to follow one of two approaches for nursing home admission.
The Medicaid-pending approach means the applicant is applying for Medicaid but has yet to be accepted. The preparation and review process for Medicaid is lengthy. Normally, 90 days are required but often families spend 6 months on the process. Some nursing homes accept Medicaid-pending residents and defer fees on the assumption that the individual will be taken to Medicaid and Medicaid will pay retroactively for their care. As one would imagine, these nursing homes are few and far between. The challenge for families is finding a nursing home that accepts Medicaid-pending individuals.
The second approach families take is to private pay (pay out-of-pocket) during Medicaid “spend-down”. Since the asset limit for nursing home Medicaid eligibility is so low (approximately $2,000), many applicants exceed this limit. These families will privately pay the nursing home to spend down their assets until they reach the Medicaid asset limit. This is less desirable than the Medicaid-pending approach in that the last of an individual’s or couple’s assets are spent on nursing home care instead of allowing a spouse a better lifestyle or allowing for an inheritance.
Neither approach is perfect nor easy. While looking for a nursing home for long-term care (as opposed to for rehabilitation) families should, at the very least, expect to spend several months on the admissions process. More details on the nursing home admission process. One can also search for nursing homes that accept Medicaid.
Families have many concerns about the quality of care at the nursing home into which they are placing a loved one. Fortunately, information about care quality is readily available. Because Medicaid and Medicare are both government programs that pay for the vast majority of nursing home care in the US. Available to them is information about the care quality at nursing homes that accept Medicare and/or Medicaid. The government makes this information available to the general public. To access the database, click here and search by zip code or nursing home name to compare the care quality of nursing homes.
Does dementia get worse in a nursing home? Does putting someone in a nursing home accelerate their cognitive decline? One recent reputable study found that patients with dementia did not do better or worse in comparison to others because they were placed in a nursing home. It is believed in years past that this was true, but it is not always the case. Today, approximately 15% of nursing homes have Special Care Units (SCU) with staff trained specifically to assist individuals with dementia. When choosing a nursing home, it is recommended that families use as many resources available to make the most informed decision. Remember to keep in mind:
– Using Medicare’s nursing home compare tool
– Finding a nursing home with a dementia special care unit