Have you had to choose whether to place a loved one in a nursing home? It might be emotionally charged if that’s the case. When things have calmed down a little, you might wonder, “How much does it cost?”
According to a recent study by Genworth Financial, the average monthly cost of nursing home care in the United States in 2021 was $7,800 for a semi-private room and $8,910 for a private room. These expenses can be very expensive and are much higher than the typical mortgage or credit card bills. The cost of nursing home care cannot be fully offset by Social Security benefits; however, these benefits can help with some costs. Medicaid, on the other hand, may also assist you in covering the cost of nursing home care if you are over 65 and receive Supplemental Security Income. Here’s how it works.
What is Social Security?
You can use Social Security to cover some expenses if you or a family member needs nursing home care but has few assets.
Unfortunately, nursing home services are extremely expensive, with daily rates running into the hundreds of dollars. The average nursing home stay is 835 days, or more than two years, according to the most recent National Nursing Home Survey conducted by the government.
Each state has different prices, and the daily rates change depending on where you are. According to the American Association for Long-Term Care Insurance:
- One in 10 residents ages 75 to 84 stays in a nursing home for five or more years
- Three in 10 residents in that age group stay less than 100 days, the maximum covered by Medicare for convalescent care
How to Pay for Nursing Home Care With Social Security?
Let’s clarify the differences between Social Security Benefits and Supplemental Security Income (SSI) before talking about how Social Security pays for nursing home care. Although they are two different programs, a senior may be qualified for both.
Social Security Vs. Supplemental Security Income
Despite having names that are somewhat similar and being run by the U.S. Social Security, Social Security Administration, and Supplemental Security Income are distinct programs. An earnings-based program, Social Security is funded by Social Security taxes. It is available to people who have worked for a specific amount of time and paid into Social Security and are older, disabled, or blind. The benefits you receive are based on your work history and overall earnings.
SSSI is a needs-based program, in contrast to Social Security. The majority of older adults with low incomes and resources are eligible for this program, but it may also be available to disabled or blind people of any age. Not Social Security taxes are used to pay for it. Federal and state laws pertaining to where you live and your income determine the benefits you can receive through the Supplemental Security Income program.
You may be eligible for both Social Security benefits and Supplemental Security Income if you meet certain criteria. Even in states where the cost is relatively low compared to the median national cost, it is unlikely that the sum of the two payments will fully cover the cost of nursing home care.
The maximum Supplemental Security Income payment for an eligible individual is $914, or $1,371 for an eligible couple, for the year 2023. The average Social Security payment will be approximately $1,827 per month. If the national median price for nursing home care in your area is $8,910 per month, there would be a significant shortfall of $6,169 per month.
Paying for Nursing Home Costs
It is insufficient to cover assisted living costs if you rely solely on Social Security.
In the form of a Social Security check, the average benefit(s) received by a retired worker is/are $1,230, and/or $2,045 for a couple. Both fall short of the price of assisted living. Additionally, it is certain that the benefit will not cover both spouses’ living expenses if one spouse needs care in a nursing home facility while the other stays at home.
Hardly enough when the average cost of a nursing home is over $6,000 per month, depending on where you live.
Seniors and families are thrust into uncharted territory as they start to examine the financial resources that are available.
The federal government’s Supplemental Security Income program, also referred to as Title XVI, is another source of extra cash. The minimum age requirement for seniors is 65 years old. It’s a needs-based program that gives blind, elderly, or disabled people a monthly check. Only people with extremely low incomes and asset restrictions are eligible for SSI.
A couple receiving SSI receives more than $1000 per month on average, while an individual receives just over $700. Find out if you qualify for the Social Security disability program.
If you are 65 years of age or older and receive Supplemental Security Income, you are eligible to apply for Medicaid, which can help you with the cost of nursing home care. It is a federally funded program that assists low-income Americans and is the main funder of nursing home room, board, nursing care, and social activities.
How Medicaid Can Help?
In order to help cover the cost of nursing home care, those who are eligible for Supplemental Security Income may also be able to apply for Medicaid. For low-income Americans who meet the requirements, there is Medicaid. Around 83 million adults and children in the United States are served by it, which is supported by federal and state funds and managed by the states.
Medicaid may cover the entire cost of nursing home care for people who meet certain criteria. There are a few restrictions, though. Your income needs to be lower than $2,563 in most states, and income is counted from the following sources:
- Earned wages
- Social Security payments
- Pension payments
- Savings or checking accounts
- Investment accounts
- Annuities
- Trusts
- Property
- Life insurance
There are frequently waiting lists for long-term care facilities, and each state determines the level of care required. In addition, even if you are approved for Medicaid nursing home care, you will still be expected to pay for the room and other services with the majority of your monthly income.
For those who meet the requirements and require nursing home care but have no other options, Medicaid may be able to offer crucial financial assistance. In order to assist with the cost of a shared room, nursing care, rehabilitation services, meals, medications, and personal hygiene products, your Medicaid coverage will provide a daily rate. However, you’ll probably have to pay out of pocket for things like a private room, extra meals, comfort items, electronics, phone and internet access, and more.
You’ll need to apply and meet the program’s eligibility requirements in order to use Medicaid and its benefits for nursing homes. However, because the income requirement is so low, you might not be eligible for benefits if you have assets like a retirement account, pension, or emergency fund.
Conclusion
The full cost of nursing home care may not be covered by your Social Security check, but it may help cover a portion of it. Furthermore, the sum of Social Security and Supplemental Security Income will not cover the entire cost of care. Those who are eligible for Medicaid may also be eligible for supplemental security income. Medicaid may in some circumstances pay for nursing home care.
