Nursing and Residential Care in the United States One Pager

  

Nursing and residential care consists of services that are utilized by people who require medical and/or custodial assistance and who will potentially move to a care facility that provides more support than caregivers can give. There are two types of care facilities: assisted living facilities and nursing homes. Assisted living facilities are for individuals who need some daily care, and can range in population from 25 to 120 residents. Individuals pay for higher levels of care depending on their needs and reside in single rooms or apartments, while sharing common rooms. In contrast, nursing homes are skilled nursing facilities that provide a greater range of health and personal care in comparison to assisted living facilities. They focus on medical care and rehabilitation services for individuals who can no longer care for themselves. Some residents live there permanently because they have ongoing physical or mental conditions that require more supervision.

There are approximately 15,600 nursing homes in the United States. On average a patient receives around 4 hours of nursing care per day. The Centers for Medicare and Medicaid Services (CMS) created a quality rating for nursing homes to help families evaluate facility performance based on three areas:

1. Health Inspections: based on the number, scope, and severity of deficiencies identified during the two most recent annual inspection surveys, as well as substantiated findings from complaint investigations
2. Staffing: defined by the number of hours of care provided on average to each resident each day by nursing staff, subject to the needs to residents in the nursing homes
3. Quality Measures (QMs): 15 different physical and clinical measures for nursing home residents to identify how well nursing homes are caring for their residents’ physical and clinical needs

There are many ways to pay for nursing and residential home care depending on the services required. Care is divided into two sectors: custodial care and high-level inpatient medical care. Custodial care is for people who can no longer care for themselves entirely and need long-term residence and non-medical assistance with the activities of daily living such as bathing, eating, walking, and dressing. This care and the services required are often not covered by Medicare. High-Level inpatient medical care consists of skilled nursing or rehabilitation care and covered by Medicare Part A for a limited time. Skilled Nursing Facility Care is covered by Medicare but for only limited periods of inpatient care and can pay for short, costly rehabilitation. A benefit period begins on the day that an individual is admitted as an inpatient in a hospital or a skilled nursing facility and it ends when no care has been administered for sixty days in a row. Medicare Part A covers days 1-20 for $0 for each benefit period, day 21-100 covers $185.50 coinsurance per day of each benefit period, and for days 101 and beyond: all costs are covered by the individual. 

There are four conditions for nursing home coverage to be covered by Medicare:

1. Prior Hospital Stay – nursing home stay must begin within 30 days of an inpatient hospital stay of at least three days in length 
2. Necessity for skilled nursing or rehabilitation – need for services every day
3. Medicare-approved facility
4. Improving condition – coverage only as long as the patient is improving, once stabilized, coverage is no longer available

Medicare Part C/Medicare Advantage Plans include Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance). Medicaid has different eligibility requirements by states for various levels of income but residents are able to receive services from any level nursing home that is certified by Medicaid and accepts Medicaid payments. For eligible beneficiaries, Medicaid pays the full cost of room and board in a nursing facility plus any regular therapies and custodial care. There are no copayments and no time limit on Medicaid nursing home coverage. 

Program of All-Inclusive Care for the Elderly (PACE) is a program for individuals eligible for Medicare and Medicaid benefits at the same time. This enables individuals to remain in their homes and communities, rather than receive care in a nursing or residential home. When individuals enroll in the program, it becomes the sole source of Medicaid and Medicare for PACE participants. Individuals can join PACE if they meet four criteria: 

1. Age 55 or older
2. Live in the service area of a PACE organization
3. Eligible for nursing home care
4. Be able to live safely in the community

Health Savings Accounts (HSA) are options available for individuals who have or previously had high-deductible health plans. With an HSA, deductibles can be paid with pre-tax dollars. Individuals can add pre-tax dollars to the account and money in HSAs carries over each year to accumulate in total. However, once an individual is enrolled in Medicare, they can no longer add to a HSA. These accounts can be used to pay for qualified medical expenses such as long-term care services and premiums up to the maximum annual tax-free amount based on age.

Through long-term care insurance, premium rates are much lower for people who are in good health when they purchase their policy. Some life insurance policies that cover long-term benefits are pricier than standard life insurance.