Nursing Home Costs in 2022 and How to Afford Them

Table of Content

• Who’s eligible for VA nursing home benefits?
• Using Personal Assets to Pay for Nursing Home Care
• Are Nursing Home Costs Tax Deductible?

For the first 20 days in a facility, Medicare pays all covered charges — excluding items such as a telephone or television, or a private room that isn’t medically necessary. Regions in the U.S. where nursing home care tends to be cheapest are the South and Southeast, and also parts of the Midwest. Prices climb significantly in states along the Pacific coastline but the highest costs in the nation are found in New England and Alaska. Before opening a discussion about a potential nursing home stay, it’s helpful to understand the likely fees for room, board and basic care, and also those for special services that may be needed. The expenses involved can vary significantly depending on the expected length of the stay and the complexity of care that the resident will be likely to require, and also where the nursing home is located.

To apply for nursing home or other long-term care, a veteran or veteran’s caregiver must fill out a special application for extended care services. For extended care services expected to last 180 days or less, the VA looks only at the income of the veteran and spouse, taking into account the veteran’s expenses. For extended care services expected to last 181 days or longer , the VA looks at the income and the assets of the veteran and spouse.

Who’s eligible for VA nursing home benefits?

One of the biggest misconceptions about Medicare is that it provides long-term nursing home coverage. The American Council on Aging publishes a list of average prices of nursing homes by state and region annually through its Medicaid Planning Assistance organization. Review this breakdown for a more accurate estimate for you or your loved one, as cost can vary dramatically based on geography. When a senior leaves their old living space empty, renting it out with careful management could be a valuable income source. Turning a home into a rental might become a permanent source of income for the family or just a temporary source of income until the home is sold. Ideally, any rental arrangement will be made when the homeowner is still a competent decision-maker.

Additionally, the reason for needing a nursing home stay must relate to the reason you were in the hospital. Because of the rising costs, it’s important to know how to pay for nursing homes. There are a variety of ways to cover the costs and it’s imperative to plan. To prepare for the possibility of needing a nursing home, you may want to consider purchasing long-term care plans. An application for VA long-term care is separate from the application to enroll in VA medical care coverage.

Using Personal Assets to Pay for Nursing Home Care

Details of these financial calculations are available from the VA’s publication “VA Copays and Charges”. Other states have no income limit but instead require the beneficiary to pay almost all income to the nursing home, with Medicaid paying the balance of the nursing home’s charges. In these states, the Medicaid program allows the resident to keep only a small amount — about $50 to $100 per month — for personal needs. If a person can meet the qualifying conditions for Medicare coverage of nursing home care, Medicare will contribute a partial payment of a limited amount.

There are two options specifically for veterans and surviving spouses. The first is the Aid and Attendance Benefit, also referred to as the Improved Pension. This is a program the provides financial assistance to war-time veterans that “require the aid of another person in order to perform his or her activities of daily living“. The Aid and Attendance program is intended to help those with limited financial means . A veteran’s income and financial assets are both considered during the application process. Veterans can use the Benefit towards the cost of nursing home care or assisted living.

Are Nursing Home Costs Tax Deductible?

These programs typically do not refer to themselves using that name. Some states offer more than one program targeting different groups of seniors and other states offer no programs. The types of services available are centered around helping an individual remain living at home.

If the patient is enrolled in a Medicare Part C Medicare Advantage plan, the plan may provide broader coverage than Medicare Part A does. Contact the plan directly to find out what its nursing home coverage and payment terms are. If the person you’re caring for is enrolled in a Medicare Part C Medicare Advantage plan, it too will cover nursing home care, at least to the same extent as Medicare Part A does, and perhaps with somewhat broader coverage. Contact the plan directly to find out the exact terms of its nursing home coverage.

Nursing Home Diversion Programs

The state VA nursing homes, unfortunately, do not have a unified eligibility or application process. However, a rule of thumb is the veteran or their spouse must be designated at least 70% disabled. Each state has its own nursing homes and each nursing home has its own eligibility requirements.

Once processed, you will receive a rate statement letter outlining your monthly rate. Please note that your rate reduction calculation will not include your assets. For example, a house you own will not be counted towards your annual net income. If you have a partner or spouse who is also eligible for OAS, you can calculate your benefits separately, resulting in both you and your partner or spouse receiving a higher benefit amount.

Long-term insurance plans offer coverage that health-care plans –– Medicare or Medicaid –– don’t normally cover. For extended care services, veterans may be subject to a co-payment of up to $97 per day. The amount of the co-payment depends on the veteran’s VA health system priority group and individual financial circumstances, and also on the type of care or service provided.

But when private funds are used, this assessment is passed directly onto the resident. Most nursing homes do a health assessment when a resident first moves in, and for many facilities, it’s part of basic care. But depending on the facility, it could show up on your bill as a one-time fee. In 2022, the average monthly cost for nursing home care is $8,145. This is referred to as the “look-back period.” Find out more on how the look-back period works. The maximum income allowance for the community spouse in 2019 is $3,160.50, and the minimum sits at $2,057.50, but the actual number will vary from state to state.