Sam, who is 80 years old, recently had a stroke. Fortunately for Sam and his family, he is on the road to recovery. After an initial 4 day stay in the hospital, Sam was released to a skilled nursing facility for rehab. He needed to regain his strength and his balance. After 8 weeks in the skilled nursing facility, Sam was strong enough to go home.
As the bills started arriving, Sam was happy to see that between his basic Medicare insurance and his Medicare supplemental insurance policy, most of his hospital and skilled nursing bills were covered.
Dave, who is also 80 years old, had his second stroke a few months ago and like Sam, went from the hospital to the skilled nursing facility for rehab. Unfortunately, Dave is not regaining his strength and balance this time and is coming to the realization that for his own safety, he may need to live in the skilled nursing facility indefinitely rather than return home.
As Dave is beginning to make peace with the fact that his continued need for substantial assistance means he isn’t going home, he learns that although his basic Medicare insurance and Medicare supplemental policy paid for his rehab stay in the skilled nursing home, it will not pay for him to continue to live in the skilled nursing home.
Why will Medicare no longer pay for Dave to stay in the skilled nursing facility? Because Dave’s reason for being in the skilled nursing facility is changing from rehab care due to a health event to custodial care due to an inability to live independently without substantial assistance.
Medicare is health insurance; therefore, it only works for health related events. As we saw with Sam, sometimes in order to recover from a health event, a temporary stay in a skilled nursing facility is required. However, this experience can lull a Medicare recipient into thinking that Medicare will pay for any stay in a skilled nursing facility. As Dave has realized, it does not.
As a general rule, the maximum number of health event triggered skilled nursing days that Medicare will pay for is 100 days. A Medicare rehab stay is triggered by a health event that results in an admission into the hospital for a minimum period of 3 overnights and a discharge to rehab care. Medicare will pay 100% of the cost for the first 20 days of rehab and then up to 80% of the cost for the next 80 days. If you have a Medicare supplemental policy, your 20% co-pay for days 21 – 100 will most likely be covered by the supplemental policy. If you do not have a Medicare supplemental policy, the 20% co-pay becomes your responsibility (with a daily rate of over $200 per day, the 20% co-pay can add up quickly).
How does someone without a Medicare supplemental policy or someone like Dave, who needs to live in a skilled nursing facility in custodial care status rather than rehab status pay for the cost of their care? Usually with a combination of personal savings, family assistance and long-term care insurance. What does someone who doesn’t have enough savings or the luxury of family assistance or the peace of mind of long-term care insurance do? They have to see if they can get assistance with the costs from government benefits such as Medicaid.
So, don’t be lulled into a false sense of security by thinking that Medicare will cover the cost of your stay in a skilled nursing facility. As we have seen through Sam’s and Dave’s experiences, except in limited health event rehab situations like Sam’s, Medicare will not provide the safety net you need for your long-term care.