Understanding “Medicare-Certified” in the Context of a Retirement Community- Part II

Last week I wrote about how many prospective residents of continuing care retirement communities face a degree of confusion about the difference in potential out of pocket cost between a “Medicare-certified” health care facility versus a “private-pay only” facility. Naturally, the term “private-pay” might lead a person to think the cost of care for a resident in such a facility would be significantly more than the same level of care in a Medicare-certified facility. To better understand the true financial impact of recieving care in a private pay health care facility compared to a Medicare-certified facility it is important to first understand what Medicare actually covers.

Contrary to what many believe Medicare does not cover custodial care (assisted living) if that is the only type of care needed. (Note: long-term care insurance is specifically designed to cover these expenses.) However, Medicare[Part A] will cover the cost of skilled care provided by a Medicare-certified facility, on a limited basis. Generally speaking, your care must be preceded by a 3-day minimum hospital stay and Medicare will only cover costs associated with a semi-private room. The full cost of care under this scenario is covered by Mediare only for the first 20 days. Between 21 and 100 days Medicare will pay $148 per day (for the year 2013). After 100 days Medicare ceases to provide coverage. For more details visit: https://www.medicare.gov/coverage/skilled-nursing-facility-care.html

Here is a helpful chart that reveals an example of your maximum exposure in a private-pay facility compared to a Medicare-certified facility:

*National average daily cost of semi-private room in a skilled nursing facility. Market Survey of Long-Term Care Costs The 2011 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs. October 2011

Note: It is conceivable that the difference could be more than shown on this chart if you enter the skilled nursing facility more than once or if you were to choose a private-room instead of a semi-private room in the private-pay facility.

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