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Nursing homes charge by the day. At this time, the average charge for nursing home care (MetLife Survey, 2007) in Georgia and Tennessee is around a $159 a day or roughly $4,770 a month. This rate is for a two-bed room. Private rooms are rarely available and average $175 a day in most facilities that offer them. For those who "shop," the MetLife survey indicates that some facilities charge as little as $125 per day but they tend to be in poorer areas and often are minimal facilities. As the price goes up one finds that the amenities get better but not necessarily the care. Pretty wallpaper is no guarantee of good care. It is possible to have poor quality care in very high priced, well maintained facilities. (Regarding quality of care issues, we suggest that you contact the National Citizens' Coalition for Nursing Home Reform).
Many people still believe that Medicare picks up the tab for nursing home stays. They are wrong. Medicare only pays for your stay while you are receiving skilled therapy (actual medical services) for "up to" 100 days. When your skilled therapy ends, Medicare stops paying for the room. Also no matter what your needs are Medicare will only 100% for up to 20 days of skilled therapy. If your needs continue, then for days 21-100, Medicare pays the bills "after" you pay the daily coinsurance payment, which is $128 (in 2008). Over 80 days, the daily co-pay alone is $9,120 (fortunately, this co-pay is covered by most Medi-gap policies). After the 100th day, Medicare will not pay for any nursing home care. Most people do not understand the limited nature of the Medicare's nursing home benefit.
After seeing how limited the Medicare nursing home benefit is, it is a foregone conclusion that Medicare that will not be paying the nursing home bills. A five year stay in a nursing home will cost over $275,000 (including medications). This financial burden often wipes out a family's finances. Without planning, even though "spousal protections" exist, these costs can leave a healthy spouse without much to live on. It is easy to see why people fear being placed in a nursing home (apart quality of care and quality of life concerns). Without planning (which should only be done by an attorney who understand Medicaid eligibility) the government will not help pay the nursing home bills until you are down to $2,000 in countable assets (married couples are treated somewhat differently under special rules which allow the well spouse to keep up to $95,100 in countable resources; the family home is usually an exempt asset until the death of both the nursing home resident and his or her spouse - after that, however, it has a huge bullseye on it called "estate recovery").
Once you have spent down to your last $2,000 as a single person or $3,000 for a married couple, you are probably eligible for Medicaid, meaning that Medicaid (or TennCare in Tennessee) pays your nursing home bills. Medicaid is a cost-share program, so your monthly income must be contributed to your care (unless there is an allowed deduction); once your income is spent, Medicaid pays the balance of the nursing home bill. Between 80% and 90% of all nursing home residents in Georgia and Tennessee are on Medicaid. This should be no surprise since most elderly cannot afford to pay $4,000 per month for nursing home care. The average nursing home stay is approximately 32 months (excluding short term rehab patients).
Good planning can change the results described above. For one thing, you don't have to spend all of your money on nursing home room and board. With effective planning, it is possible to preserve assets that can be used to raise the quality of life for nursing home residents. Assets may also be preserved to enhance the quality of life for the spouse of a nursing home resident. In some instances, after the Elder is adequately protected, it may be possible to protect assets for other purposes are well. However, it is impossible to know what can be done until you decide to do some planning.
Cost of Care
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