If you are suffering from a serious illness or disability, you may eventually need to move into a facility that provides constant care, but that can be a problem without advance planning. While Medicaid covers the cost of a nursing home for those who qualify, as our Brooklyn elder law attorney explains, unexpected problems during the lengthy application period may put your family in a difficult financial situation.
Handling Nursing Home Costs Before Medicaid Approval
Due to Medicaid’s strict eligibility rules and five-year lookback requirement, you could end up dealing with a penalty period without full benefits. You may also need to spend down your bank account or convert countable assets into non-countable forms to qualify for coverage.
If you didn’t plan ahead for Medicaid coverage, you may end up needing to pay costs on your own for a period of time. There’s a silver lining there, however. Nursing homes make more profit off private pay residents than someone whose care is covered by Medicaid. That means you can often get into a facility faster by starting as a private pay patient and then applying for Medicaid while you are a resident at the nursing home. There is a catch, though. While you are in “Medicaid pending” status awaiting benefits, a nursing home can legally require you to:
- Sign a promissory note
- Pay a hefty deposit
- Prove you have “key money,” meaning the state of your finances allows you to pay for several months if Medicaid isn’t approved immediately
In some cases, nursing homes won’t charge you during the Medicaid-pending period, which is one reason why it is so important to plan ahead and know which nursing home is the best fit for your situation. If the facility does charge while benefits are pending, you can end up paying on your own or with the help of your family until funds run out in the hope Medicaid will be approved at that point.
In many situations, the nursing home isn’t allowed to evict you while waiting on Medicaid approval, which is vitally important for low-income senior citizens who simply can’t pay while waiting for benefits to kick in. The good news is that the nursing home will be reimbursed by Medicaid for those unpaid months, starting from the date the application was submitted or in some cases even retroactively covering up to three months before applying.
While the facility will eventually get payment from Medicaid, it is extremely unlikely that you personally will ever get any money back from the nursing home, whether you were paying for yourself or helping a loved one cover the costs. While those funds you paid are potentially eligible to be returned after benefits begin, you will likely have to file a time-consuming lawsuit to actually receive reimbursement, even if the nursing home provided payback terms in writing.
That means that in situations where the cost of a nursing home stay is financially devastating, it can be a better idea to simply not pay, or instead pay less than the full bill until coverage begins. In some situations, Medicaid won’t actually cover months where the bill was privately paid in full, which can make it even more difficult to receive reimbursement.
The key is to discuss the situation with an experienced long-term care planning attorney to find the best way to protect yourself financially while ensuring the nursing home still gets paid. Depending on your circumstances, you may need to utilize pooled income trusts or other strategies to protect your family while still qualifying for nursing home coverage.