For those considering a Continuing Care Retirement Community there is often some degree of confusion about the ultimate financial impact to the consumer of moving to a community that is private-pay versus one that is “Medicare-certified.” Within the context of long-term care Medicare certification is only applicable to skilled nursing facilities (SNFs), which are licensed in their respective state to offer 24-hour medical care provided by a registered nurse or rehabilitative staff, including procedures such as IV and drug administration, wound care, lab tests, physical therapy, and more. As it pertains to continuing care retirement communities, or CCRCs, such certification, or lack thereof, has no bearing on the cost of services delivered in the independent living or assisted living phases of the community. It applies only to the skilled healthcare facility within the community.
To help understand the personal financial impact of receiving services in a Medicare-certified facility versus a private-pay facility it is important to first understand what Medicare covers. Contrary to what many believe Medicare does not cover the cost of non-medical, assisted living services if that is the only type of care needed. However, Medicare [Part A] will cover some of the cost of medically-necessary skilled nursing care when such services are delivered by a Medicare-certified provider. There are certain stipulations that must be met before Medicare will pay. For instance, the recipient of care must have first had a hospital stay of at least three days and admittance into the facility must take place within thirty-days of release from the hospital.
When such stipulations are met Medicare will pay the full cost of care (in a semi-private room) for the first 20 days. Between 21 and 100 days Medicare will pay $152 per day (2014). After 100 days Medicare ceases to provide coverage.
In order to better understand the maximum financial exposure one would face in a private-pay facility compared to a Medicare-certified facility the following chart shows a comparison of out of pocket costs:
|Medicare-Certified Facility||Private-Pay Facility||Difference||Total days||Total Difference b/w Medicare Certified and Private Pay|
|Days 1-20||$0||$207*||$207||20 days||$4,140|
|Days 21-100||$152||$207||$55||80 days||$4,400|
*National average daily cost of semi-private room in a skilled nursing facility. Genworth 2013 Cost of Care Survey
As the chart reveals, one’s maximum exposure in a private pay facility compared to a Medicare-certified facility over the first hundred days is approximately $8,500. Beyond a hundred days Medicare does not pay anything so all care received at that point would be out of pocket, regardless of whether or not it is received in a Medicare-certified facility.
However, the hundred day period under Medicare can reset if there has been a substantial break in time between two separate stays in the healthcare facility. Therefore, the total difference could ultimately be more than shown on this chart if there are multiple qualifying stays in a Medicare-certified facility.
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