In 2008, the average private pay cost of nursing home care was about $76,000 per year for a private room and $68,000 for a semiprivate room. For services in the community, the average private rate for a home health aide in 2008 was $19 per hour.12
Myth # 5: Family caregivers don't care for their own anymore, and simply rely on Medicaid.
Facts: More than 90 percent of persons age 65 and older with disabilities who receive help with daily activities are helped by unpaid informal caregivers; 66 percent receive no paid care at all, relying entirely on informal caregivers.13
The estimated economic value of informal caregivers' contributions in 2006 ($350 billion) exceeded total Medicaid spending for both health care and LTC ($299 billion in 2006).14
Myth # 6: Medicaid could save lots of money if it cracked down on rich older people who hide their assets to get on Medicaid.
Facts: Most states permit Medicaid beneficiaries to keep no more than about $2,000 in liquid assets. The value of the home generally is exempt (provided equity does not exceed $500,000 or, at state discretion, $750,000). Eligibility is denied if the applicant has transferred assets in order to qualify for Medicaid. The state looks back five years to determine whether asset transfer rules have been abused.
The Deficit Reduction Act of 2005 implemented strict new policies that prevent people who transferred assets – even for legitimate purposes – from accessing Medicaid coverage for LTC. Medicaid also has a program for recovering the value of LTC services from the estates of deceased beneficiaries.
Myth # 7: Once you qualify for Medicaid, the government pays for all your care.
Facts: Medicaid nursing home residents contribute all of their income to help pay for their care, minus a “personal needs allowance” of between $30 and $50 per month in most states. This allowance typically is used to pay for necessities such as laundry, clothing, and toiletries.
Myth # 8: Medicaid is providing “Cadillac” services that need to be scaled back.
Facts: Medicaid provides only medically necessary care and serves a poorer, sicker, frailer, and more disabled population than private sector plans do.15 While persons with higher income can often subsidize their coverage with their own money, low-income Medicaid beneficiaries cannot.
Medicaid is often the only option for persons with severe disabilities who need LTC, and the LTC benefits Medicaid covers are not luxurious. For example, Medicaid reimbursement rates for nursing home care (about $160 per day on average in 2007) are lower than those paid by persons paying privately ($181 per day for a semiprivate room in 2007).16