What do you pay?
What do they pay?
Traditional Medicare, Medicare Advantage and what they pay
We all pay into a Medicare trust fund with every paycheck. If we have paid in for 10 years, at 65 we are all eligible for Medicare. Even if we have not paid in for that many years, we can buy in.
We can choose between either traditional Medicare, with a choice of Medicare supplements, and a stand-alone prescription drug program or an insurance company’s bundle of hospital, doctor’s office and prescription drug coverage in a Medicare Advantage policy. As we approach 65, we begin to get postcards and letters from insurance companies advertising their wares. We may be enticed by the one-stop shopping or offers of low-or-no premiums.
But there’s one catch – or more. Medicare Advantage does not have a Medicare Supplement policy which, based on which policy you choose, could cover the 20% copay. By the time we are 70, the average copays and deductibles are as expensive as paying an original Medicare premium. Unless we are very healthy, we will not be able to switch to original, or traditional, Medicare but will be stuck with higher bills.
That’s not all. While our tax dollars pay 105% of the original Medicare cost to the insurance companies for their Medicare Advantage programs, those insurance companies are more likely to deny needed care, trusting that a good percentage of us will not know how to appeal or go to a lawyer for help.
Medicare only pays for nursing home care following a hospital inpatient stay of at least three midnights and then only for 20 days, though another 80 days is available with a copay. Medicare Advantage programs are likely to force us out of a nursing home after 14 days.
How much does Medicare pay? “In 2019, for example, Genesis HealthCare received $535 per resident per day from Medicare – about 2 ½ times the $215 it got for Medicaid patients.” Harris Meyer, “A Failing Business Model” AARP bulletin Dec 2020 page 26.
This explains why nursing homes are so happy to go along with insurance companies, or with traditional Medicare, in kicking people out while they still need intensive rehabilitation and nursing home care. A six year nationwide study of hundreds of thousands of nursing home discharges reported in the Journal of the American Medical Association found that discharges peaked at days 19, 20 and 21, just when the requirement of a copay kicks in. Men and people of color were the most likely to be discharged. Basically, anyone who appears unlikely to be able to make the copay is at risk for an early discharge.
Nursing homes disguise this by calling themselves “rehab” and limiting the number of actual, or acknowledged, Medicaid beds. They also announce that a patient has “plateaued,” pretending to be ignorant of the requirement that Medicare pay for therapy to maintain function or prevent deterioration, not merely to progress.
Medicaid and what they pay
Medicaid will pay for nursing home care for someone who meets certain income and asset requirements if it is “medically necessary.” According to Medicaid rules, nursing home care is medically necessary for someone whose cognitive decline makes it unsafe for them to live elsewhere. Nursing home care is also medically necessary for some who needs daily care provided by, under the supervision or at the direction of a nurse or who requires therapy five days a week.
Today Texans who must rely on Medicaid to pay for continuing nursing home care have a difficult time finding a bed. Nursing homes have long had internal rules limiting the number of beds available for people whose Medicaid applications are pending. A “Medicaid pending” bed is a cash flow problem for a nursing home. While Medicaid backpays for up to three months, the nursing home must wait for that payment.
A greater problem arises if processing the Medicaid application takes longer. Today, with over 1,000 people having left the Texas Health and Human Services Commission, processing typically takes longer. This results in nursing homes not being paid.
Elder law attorney, Terry Garrett, is a member of the National Academy of Elder Law Attorneys and is an Approved Guardianship Attorney. She assists people in elder law, estate and special needs planning, guardianship and settling estates. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.