From the Guidelines
Nursing home care is primarily paid for through a combination of personal funds, long-term care insurance, Medicare, and Medicaid, with Medicare reimbursing approximately $500–$600 a day for rehabilitative or postacute stays, and Medicaid paying an average of $125 a day for long-stay residents. The payment for nursing home care can be broken down into several key components, including:
- Personal funds, such as savings, retirement accounts, or proceeds from selling their home
- Long-term care insurance, which can help cover costs if purchased before needing care
- Medicare, which provides limited coverage, typically paying for skilled nursing facility care for up to 100 days following a qualifying hospital stay, but does not cover long-term custodial care 1
- Medicaid, which becomes the primary payer for many residents after they have depleted their personal resources, but eligibility requires meeting strict income and asset limits that vary by state Some key statistics to note include the significant financial incentives for nursing homes to focus on providing postacute and rehabilitative services for Medicare beneficiaries, with Medicare reimbursing approximately $500–$600 a day, compared to Medicaid's average of $125 a day for long-stay residents 1. The average cost of nursing home care in the United States is substantial, ranging from $7,000 to $10,000 per month depending on location, making financial planning for potential long-term care needs an important consideration for aging adults. It's also worth noting that the barriers to integrating acute and long-term care services in nursing homes include fragmented funding sources, fear of financial risk on the part of providers, and the dearth of training and knowledge necessary to seamlessly combine the two types of services 1.
From the Research
Payment Sources for Nursing Home Care
- Medicaid is a significant source of payment for nursing home care, covering three out of five nursing-home residents in 1987 2
- Private-pay is another major source of payment, with nearly all of the remainder of nursing-home residents being private-pay in 1987 2
- Some residents may spend down their assets to become eligible for Medicaid, with 18 percent of Medicaid recipients having spent down and been originally admitted as private-pay 2
Factors Affecting Nursing Home Prices
- Nursing home prices can vary significantly depending on the organizational and market structure, with for-profit chains charging the lowest prices and nonprofit chains charging the highest prices 3
- Occupancy rates and market concentration can also affect prices, with higher occupancy rates and more concentrated markets leading to higher prices 3
- The growth of nursing home prices has consistently outpaced growth in consumer and medical care prices 3
Comparison of Nursing Home and Home Health Care Costs
- A study in Alabama found that home health beneficiaries had similar acute care costs to nursing home beneficiaries, but had lower Medicaid long-term care costs 4
- The study also found that home health beneficiaries had a higher survival rate and fewer hospital visits than nursing home beneficiaries 4
Regulatory Challenges in Nursing Home Research
- Conducting research in nursing homes can be challenging due to extensive regulation designed to protect a highly vulnerable population 5
- Researchers must navigate regulatory challenges such as protecting resident privacy and obtaining informed consent 5
Acceptance of Illness and Quality of Life in Long-term Home Nursing Care
- A study in Poland found that acceptance of illness was associated with higher life satisfaction in patients receiving long-term home nursing care, particularly among those over 65 years old 6
- The study also found that functional capacity and duration of long-term care coverage had a positive effect on acceptance of illness and life satisfaction 6