Why Do Nursing Homes Ask for Your Financial Information?

When considering nursing home care, you must prepare to go through a tedious screening process to assess if you are eligible. Apart from health details, you must also provide financial information, however sensitive it is.

Nursing homes ask for your financial information to ensure you have the means to fund nursing home care services. It helps them to determine whether you qualify for Medicaid or Medicare benefits or whether you'll pay through a private insurer or out-of-pocket cash.

Why Financial Disclosure Is Important to a Nursing Home

Every resident in a nursing home spends an average of $260 daily for round-the-clock nursing care, accommodation, food, and miscellaneous expenses. Failing to perform a financial screening risks the nursing home accommodating residents who cannot afford the services.

Financial disclosure helps to determine your asset's worth and the amount you can afford to pay. The payment options include:

Medicaid and Medicare

You must meet certain conditions to qualify. Medicaid is a means-tested program, meaning your assets and income must be within the limit set by the state. When you meet the requirements, Medicaid pays 100% of your long-term nursing care costs.

Medicare is ideal for residents who need short-term nursing care not exceeding 20 days. For the following 80 days, Medicare requires the resident to pay a portion of the daily cost.

Private Insurer

Private insurers can pay for select nursing care services depending on the plan. However, most will not cover non-medical costs.

Personal Funds

You can use personal savings to meet the nursing care costs if you have no federal government or private insurance coverage.

Financial Details Disclosed to a Nursing Home

To ensure speedy admission, you must be ready to provide:

• A list of all assets, including cash, trust fund, checking and savings account, real estate, bonds, and stock
• Insurance policies you hold
• Asset transfers that have happened in the last three to five years
• Benefits such as railroad retirement, VA benefits, SSI funds, or government pension
• Monthly obligations for debts and mortgages

Nursing Home Resident Financial Rights

Medicaid and Medicare-certified nursing homes must adhere to the Nursing Home Reform Law of 1987, which gives residents the following rights:

• Sign a written agreement when depositing money
• Access to your cash, bank account, and financial records
• The nursing home must maintain an accounting system for your funds
• The nursing home should safeguard your finances from loss
• If a resident passes away, remaining funds must be refunded within 30 days

Can Nursing Home Costs Threaten Your Assets?

It's unlikely that a nursing home will seize your assets if you default on payment. However, if you want to fund your nursing care costs using Medicaid, your countable assets cannot exceed $2,000.

Legal ways to protect your assets include:

• Buying a Medicaid-compliant annuity
• Pay for long-term care insurance
• Place your assets in an irrevocable trust

Final Thoughts

When nursing homes ask for your financial information, they're trying to evaluate if you can afford the nursing care cost and the means you'll use to pay them. Prepare all your financial documents to make the admission process as fast as possible.

About Chip Mitchell

Chip Mitchell is the founder of Growing Gray USA. With over a decade of experience owning a home care company, he has helped hundreds of families navigate the complexities of caring for aging parents.