This article will be exploring how Nursing Homes are paid by Medicare Part A, Medicare Supplements, and why Medicare Advantage Plans will need to be discarded in a skilled-nursing facility if you are simultaneously seeking Florida Medicaid Institutional Care Plan (ICP) benefits to pay the nursing home co-pays.

Medicare Part A pays for the first 20 days of rehab or services provided by a skilled nursing facility (i.e. nursing home).  Medicare Part A then pays a reduced rate for days 21 through 100 (in 2020, the nursing home resident will owe a $176.00 per day co-pay for skilled nursing facility – some Medicare Supplements may cover a portion of this co-pay).

But, after 100 days of being in a nursing home, Medicare will not contribute a penny toward the cost of the skilled-nursing-facility resident’s bill. It doesn’t matter if you have the worlds-best Medicare supplement – after 100 days the nursing home will expect the resident to privately pay (unless he or she is Florida Medicaid eligible).

When a Florida resident becomes eligible for Florida Medicaid Nursing Home benefits (Medicaid ICP), Medicaid pays Medicare Premiums,Medicare deductibles and Medicare copays.

This is not the case with Medicare Advantage Plans. To understand why, its important to understand what you’re signing up for and what you’re giving up by choosing a Medicare Advantage Plan vs. Traditional Medicare with a Medicare Supplement

What, Really, Is a Medicare Advantage Plan?

Traditional Medicare (also called “Original Medicare”) is a government run health-insurance program. In contrast, when a Floridian is enrolled in a Medicare Advantage Plan they are, in fact, NOT covered by Medicare.Instead, they have chosen to give up their Traditional Medicare in favor of a private health insurance company (who sponsors the Medicare Advantage Plan such as: Humana Gold Plus, AARP Medicare Advantage, United Healthcare, Carefree Plus, Aetna Medicare Premier, etc…).

The private health insurance company that issues the Medicare Advantage Plan, in turn, is paid a reduced rate flat by Medicare.Medicare limits its financial exposure by letting the health insurance company take on some of the financial risk and administrative burden (processing medical bills).

In other words – when you are enrolled in a Medicare Advantage Plan, your medical provider bills are paid by the private health insurance company that sponsors the Medicare Advantage Plan (and partially by you depending on your premiums and co-pays). Traditional Medicare (i.e. the government) simply pays the health-insurance company some flat rate in exchange for the health insurance company taking on this responsibility).    

Why does the Difference Between Traditional Medicare and Medicare Advantage Plans matter in a nursing home context?

In short – Medicaid only pays Traditional Medicare premiums and copays – but not the premiums and copays of a private health insurance company.So, once the Medicare Advantage enrollee uses up their Medicare Advantage Plan’s coverage for skilled-nursing facility coverage, the enrollee is on their own.

Since Medicaid does not pay private health insurance companies, if you or your loved one is in a skilled nursing facility / nursing home / rehab facility, your elder law attorney will advise you to disenroll from your Medicare Advantage Plan in favor of Original Medicare.

If you, or your loved one, is in a nursing home and owes co-pays for the nursing-home bill before Medicaid kicked in, there is still a mechanism by which the skilled nursing facility can get paid. This is a process called submitting for unreimbursed medical expenses or “UMEDs” (a subject for another article).

Click here to read about the differences between Medicare and Medicaid.

When to call a Florida Elder Law Attorney?

If you or your loved one already has less than $2,000 in countable assets and earns less than the income cap (currently $2,349 in 2020) and requires skilled nursing facility / nursing home care, then you probably wouldn’t need more than an initial consultation just to review incapacity planning documents (such as a durable power of attorney or healthcare advanced directives) if needed. If there is a house or condo, then you might want a Florida elder law attorney helping to make sure that a probate isn’t needed upon the Medicaid recipient’s passing.

If there is a community spouse (a spouse who does not need skilled nursing home care) it may also make sense to speak with an elder law attorney to discuss how to divert income from the nursing home resident to the healthier spouse.

However, if there are assets or income above Florida Medicaid’s thresholds then a Florida elder care lawyer can help protect those income and assets. To learn more, schedule a consultation today.

Elder Law Resources

How to Pay for Nursing Home Care

Original Medicare vs. Medicare Advantage