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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.
To know more about financial disclosure in a nursing home, keep reading.
Why Financial Disclosure Is Important to a Nursing Home
Any institution with expenses must also have income sources to keep running, and nursing homes are no exception. 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. This can put the facility into a financial crisis and impair its ability to provide quality care.
Financial disclosure helps to determine your asset’s worth and the amount you can afford to pay. Also, it reveals to the nursing home the means you’ll use to pay for services. The payment options include the following:
Medicaid and Medicare
Medicaid and Medicare programs are suitable means of funding nursing care bills. However, you must meet certain conditions to qualify for the program. And unfortunately, not all nursing homes accept these payment methods.
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.
On the other hand, 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.
Nursing homes will need this information to file for reimbursement with whichever institution you qualify for.
Private Insurer
Private insurers can pay for select nursing care services depending on the plan. However, most will not cover non-medical costs, and your responsibility might be to match the unpaid amount. Nursing homes need this information to organize with the insurer how much they’ll pay and the payment plan.
Personal Funds
You can use personal savings to meet the nursing care costs if you have no federal government or private insurance coverage. You’ll need to provide details like your income and assets to prove you can afford the cost of long-term care.
Financial Details Disclosed to a Nursing Home
To ensure speedy admission into a nursing home, you must be ready to provide the following financial details:
- A list of all assets, including cash, trust fund, checking and savings account, real estate, bonds, and stock Could Nursing Homes Take Your Savings Account?
- The insurance policies you hold, like life insurance, long-term care insurance, and burial insurance, and if they are fully paid
- Asset transfers that have happened in the last three to five years
- Benefits such as railroad retirement, VA benefits, SSI funds, or government pension that you receive
- Monthly obligations for debts and mortgages
What Happens if the Nursing Home Costs More Than Your Net Worth?
If, after a financial assessment, the nursing home determines you cannot afford the amount, you can settle for a top-up agreement. The law does require a resident to pay from their capital in limited circumstances. So, a relative or a friend can top up the amount.
In circumstances where the nursing care cost is too high, the nursing home recommends an affordable home that’s inexpensive. Doing so saves them from bad debts, which can cripple their service delivery processes.
Nursing Home Resident Financial Rights
The nursing home opens a trust account when a resident gets admitted into the facility. This account acts as a conventional bank account with regular statements, accrued interest, and reliable oversight. All funds from pension checks, Social Security, family and friends, and other sources go into the account, and the nursing home pays for all resident’s bills.
To protect the residents from financial manipulations, all nursing homes undergo inspections yearly to ensure they meet federally mandated accounting standards.
Medicaid and Medicare-certified nursing homes must adhere to the Nursing Home Reform Law of 1987, which requires them to protect the financial rights of residents.
The law gives residents the following rights:
- When you deposit money with the nursing home or ask them to account for it, you might sign a written agreement to show your consent.
- The nursing home must give you access to your cash, bank account, and financial records.
- The nursing home should maintain an accounting system for your funds and never combine it with another resident’s or the nursing home’s funds.
- The nursing home should safeguard your finances from loss.
- If a resident passes away, the nursing home must refund the remaining funds to the court or person managing their estate 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.
If your assets exceed this amount, Medicaid will deny your application until you spend down your assets to the threshold. To qualify, this can cause you to sell your hard-earned assets below the market value. Fortunately, there are several legal ways to protect your assets.
They include:
- Buying a Medicaid-compliant annuity: This method is ideal when one spouse is institutionalized and the other is healthy. It helps to reduce the assets entitled to each person by transferring a lump sum to the annuity.
- Pay for long-term care insurance: Though the premiums for this insurance plan have drastically increased over the years, it can help you protect your assets because it covers adult day care, assisted living, and home care for individuals with chronic illnesses.
- Place your assets in an irrevocable trust: Once you put the assets in the trust, you name a beneficiary, and they no longer belong to you and are not counted towards Medicaid eligibility.
Final Thoughts
When nursing homes ask for your financial information, they’re not being nosy or intrusive.
They’re trying to evaluate the following:
- If you can afford the nursing care cost in the facility or need to look for a cheaper one within your means
- The means you’ll use to pay them and if you qualify for any benefits.
So, when getting ready to enter a nursing facility, you should prepare all your financial documents to make the admission process as fast as possible.
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