Nursing Home Payment Methods
Colorado Nursing Homes

 

Ways to pay for care services...

Nursing homes and assisted living facilities need to disclose all of the costs of care to an incoming resident reguardless of the type of fee or service. Aside from this disclosure requirement, each assisted living facility generally is at liberty to set its own rate for rent and services. Because facilities have flexibility in how they arrange services, residents must make sure they fully understand the admission agreement and payment structure.

In some cases the cost of care may rise over time due inflation or the level of care an individual needs. This could affect the budget and planning aspects of taking care of mom or dad in the future. Make sure there is a plan that may assume a 2% rise per year over a 10 year period for the cost of care. In recent years monthly rates have fallen due to the economic times. However, rates have stabilized and have risen in some areas in the last few months. Each family will be notified in writing 30 - 60 days prior to any monthly rate modification, up or down.

A la carte - Per month method

One method of payment structure is a-la-carte pricing which includes a base monthly rent fee with additional charges for other services. This means things such as bathing, dressing, hair styling, laundry, television, phone, and other services are charged additional to the base rent cost. This type of pricing allows the resident to only pay for services received.

All-inclusive - Per month method

A popular method for paying care costs is the All-inclusive structure. This method implies all costs are stated in a tier level with a fixed cost set for the level of care received. The care provided is outlined at the time of admission and clearly states which care needs are covered under the stated rate. Generally, these costs typically exclude Depends, some personal items, telephone, and transportation. Most smaller facilities utilize this type of pricing model.

Sub Charges

In addition to monthly rent and service charges, some facilities may charge a security deposit. Others may charge a non-refundable entrance or community fee or commons fee. Most deposits are refundable unless otherwise stated. Many facilities charge an additional fee if payment for services is received late. Fees may vary from a set fee to an additional charge for each day beyond the date payment was due.

Private Payment

The majority of residents in a nursing home or assisted living pay with private funds. These funds may be from veterans benefits, long term care insurance, savings, pensions, IRA's or other private sources as well as family members. In many cases care needs are paid for by divesting assets such as a home or other property. Many times this is done so that a person can qualify for government benefits if it is deemed that there is not enough money to cover the total cost of quality long term care facilities.

Long Term Care Insurance

A special type of insurance called Long-term Care Insurance is designed to help pay for assisted living needs. Long-term care insurance typically pays a predetermined amount of money for a certain period of time. Many policies have set rates that do not increase as the insured ages or changes to medical condition.

Some individuals may not be eligible to purchase long-term care insurance. Since insurance claims with long-term care insurance may not be filed for a long period, applicants must thoroughly undertsand the terms of policy and when the policy takes effect and what facilities are covered.

Medicaid Safetynet

Medicaid, unlike Medicare, is not concerned with the work history of an individual or spouse. Medicaid eligibility depends on the individual’s financial need and the length of time they have been without assets.

Medicaid is available only to an individual who is at least 65 years old or is disabled. An individual who receives Supplemental Security Income (SSI) is eligible for Medicaid automatically. Otherwise, an individual can be eligible for Medicaid when his or her available savings fall below approximately $2,000.

Veterans Benefits

Veterans of the United States Military and Coast Guard may be able to pay for care by benefits earned through service. These services are offered through the Department of Veterans Affairs. It provides benefits for veterans and surviving spouses who need assistance with their activities of daily living and meet specific requirements. A veteran is eligible for up to $1,644 per month with a surving spouse being eligible for up to $1,056 per month.