Medicare‐Certified vs. Private Pay and the Cost Impact
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.
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 medicallynecessary 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 admitance 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 twenty days. Between twenty-one and one hundred days Medicare will pay $152 per day (2014). After one hundred 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:
|Private-Pay Facility||Difference||Total Days||Total Difference
|Days 1-20||$0||$207||$207||20 Days||$4,140|
|Days 21-100||$152||$207||$55||80 Days||$4,400||$8,540|
As the chart reveals, one’s maximum exposure in a private pay facility compared to a Medicarecertified facility over the first one hundred days is approximately $8,500. Beyond one 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.
Keep in mind, however, that the 100-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 what is shown on this chart if there are multiple qualifying stays.