When a parent needs long-term care, there is often a common pattern. Mrs. Smith, aged 85, falls at home and breaks her hip. She is taken to a hospital. At the hospital, she receives surgery for her broken hip. After the surgery, Mrs. Smith receives acute rehabilitative care in the hospital. The hospital staff monitors her for three days.

Mrs. Smith is discharged to a “rehab center” for continued rehabilitation for her newly mended broken hip. The rehabilitative services that Mrs. Smith was receiving in the hospital were acute level rehabilitative services because care in a hospital is acute care. The services that Mrs. Smith receives in the rehab center are sub-acute rehabilitative services, one step down from acute care.

A rehab center is a skilled nursing facility. A skilled nursing facility is what is commonly known as a nursing home. At this stage of her care, most people do not realize that Mrs. Smith is in a nursing home. Most people believe that a rehab center is distinct from a nursing home, but in the vast majority of cases, the rehab center is a skilled nursing facility, more commonly known as a nursing home. While some people do receive out-of-hospital rehabilitative services in an acute care facility, there are few acute care rehabilitation centers in New Jersey.

Since Mrs. Smith is 85 years old, she is a Medicare beneficiary. Medicare is a government-provided health insurance program. The Medicare program provides health insurance to the aged (over 65) and disabled.

Mrs. Smith may also have private health insurance. Her health insurance is secondary to her Medicare coverage. In other words, Medicare is her primary insurance and is the first insurance to pay for her care—in the hospital and in the nursing home. Medicare coverage has certain copayment requirements and deductibles. Mrs. Smith private health insurance will fill these “gaps” in her Medicare coverage.

For this reason, Mrs. Smith health insurance program is commonly known as a “Medigap” insurance policy. How many of the gaps her private health insurance covers depends on the policy of insurance she purchased. Some private health insurance covers all the gaps, some cover only a few of the gaps.

At most, Medicare will cover up to 100 days of sub-acute rehabilitative services in the nursing home. A Medicare beneficiary who spends three or more days in the hospital—as Mrs. Smith did—is eligible to receive up to 100 days of coverage, but the 100 days is a maximum, not a guarantee. Most people in Mrs. Smith situation do not receive the full 100 days simply because they do not benefit from 100 days of rehab.

Mrs. Smith may have been living alone prior to her fall. Her family may have been concerned about her ability to manage her own affairs. There may have been scary episodes at home, such as mom leaving food cooking in the oven for too long, forgetting to bathe, forgetting to change her clothes, forgetting to take out the trash. The family may have been debating whether they should place mom in a long-term care facility. Mrs. Smith was showing the early signs of dementia.

The fall may have exacerbated Mrs. Smith’s decline. The anesthesia she received during her surgery may have further exacerbated her decline. She is now in no condition to return home. She needs to stay in a nursing home.

The nursing home staff may inform the family that Mrs. Smith has to leave the “rehab center.”  Nursing homes like providing rehabilitative services because Medicare’s reimbursement rate is particularly good. Once Mrs. Smith is finished with rehab, she will either have to pay privately for her care (at the rate of $10,000 to $15,000 a month) or qualify for Medicaid.

Medicaid is a health payment plan for needy individuals. In order to qualify for Medicaid, a person must have a limited amount of assets. For a Medicaid beneficiary, a nursing home receives about $5,500 per month from the state as compensation for the care of the Medicaid beneficiary, far less than the private pay rate the nursing home charges. Nursing homes like Medicaid because it pays, but they do not like Medicaid because it pays far less than Medicare (for rehab) or private payment (for long-term custodial care).

Next article, I am going to discuss the issues that arises when Mrs. Smith needs to stay in the nursing home for long-term custodial care.