Average cost of a year of nursing home care: $99,000
By Gil Smart, Staff Writer email@example.com
According to the Pennsylvania HealthCare Association, the median annual cost for a private room in a Pennsylvania nursing home is $99,280. Nationally, the figure is $81,031.
How can anyone afford this? In part, by dying.
"The real truth," said attorney Jeff Goss of the Lancaster firm Brubaker Connaughton Goss & Lucarelli LLC, "is also that statistically, clients only live less than a year in skilled care and then die."
Other nursing home residents may live on -- rapidly depleting their assets, if they have any to deplete.
Goss, who specializes in elder law, said that once a client's income is factored into the equation, the annual out-of-pocket expense is closer to $70,000-$80,00 per year -- "very real," he said, "but not as extreme as the gross figures."
Still, how does anyone pay even that? Goss said clients who ask the question early on -- long before they may need skilled nursing care -- may purchase long-term care insurance. Others may simply be able to afford the tab: "With a $100,000-$200,000 house and $300,000-$400,000 [in savings], plus Social Security and a small pension, I tell my clients I have no real concerns, but they should hold onto their assets as they may need a good amount to get through a stay at a home."
The most he's ever seen a couple burn through is $400,000 he said.
Attorneys also advise clients to give their money away, so they might be eligible for Medical Assistance.
But for those with little to give away, the only option may be Medicare for short-term stays, Medicaid for longer stays.
Historically, said Stuart Shapiro, president and CEO of the Pennsylvania Health Care Association, which represents nursing homes and personal care homes in the commonwealth, Medicare reimbursement rates were high enough that they "cross-subsidized" Medicaid: Medicare paid more than the cost of care, and that helped bridge the gap between what Medicaid paid, and the actual cost of care, which was usually higher.
But in 2011, the federal government cut Medicare reimbursement rates by 11 percent, which hammered nursing homes. Meanwhile, Medicaid reimbursement rates lagged further and further behind the cost of care. According to a December report by consultant Eljay LLC, it cost an average of $234.40 per day for nursing homes to deliver care to Medicaid patients; Medicaid reimbursed the homes $208.14, leaving a "gap" of $26.26.
Ron Barth, president of LeadingAgePa.org, an organization which represents nonprofit homes across the state, is one of many advocates who say that unless government boosts reimbursement rates, nursing homes will face even tougher financial decisions -- and residents who can't pay the cost of care out of their own pocket may have fewer and fewer options.
"If you run out of money you can stay in a not-for-profit [nursing home], they won't ask you to leave," he said. "But [nursing homes] will have to look at not admitting as many people in need in the first place.
"You've got to get the revenue to stay in business."n
"The real truth is also that statistically, clients only live less than a year in skilled care and then die."
Attorney Jeff Goss