According to a recent study by Genworth Financial, the median cost of nursing home care in the United States was $8,910 per month for a private room and $7,800 per month for a semi-private room in 2021. These costs are significantly higher than your average mortgage or credit card bills and they can be a hefty financial burden. Social Security payments can help offset some of the expenses, but these payments alone won’t cover the total cost of nursing home care. However, if you’re age 65 and older and get Supplemental Security Income, Medicaid can also help you pay for nursing home care. Here’s how it works.
A financial advisor can help you create a financial plan for your medical needs and goals.
Social Security vs. Supplemental Security Income
While they’re somewhat similar in name and both managed by the U.S. Social Security Administration, Social Security and Supplemental Security Income are different programs. Social Security is an earnings-based program that’s paid for with Social Security taxes. It’s available to older adults, disabled, or blind individuals who’ve paid into Social Security through their jobs for a set time period. Your work history and total earnings determine the benefits you receive.
Unlike Social Security, Supplemental Security Income is a needs-based program. This program is generally available to older adults with limited resources and a low income, and it may also be available to disabled or blind individuals of any age. It’s paid for by total tax revenue, not Social Security taxes. The benefits you can get through the Supplemental Security Income program are determined by federal and state regulations related to where you live and your income.
Can You Have Both Social Security and Supplemental Security Income?
If you meet certain eligibility requirements, it’s possible to get both Social Security payments and Supplemental Security Income. However, it’s unlikely the total of both payments will cover the full cost of nursing home care, even in states where the cost is relatively low compared to the median national cost.
For 2023, the average Social Security payment will be around $1,827 per month, and the maximum Supplemental Security Income payment for an eligible individual is $914, or $1,371 for an eligible couple. If nursing home care in your area costs $8,910 per month (the national median), that leaves a shortfall of around $6,169 per month, which is a hefty sum.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
How Medicaid Can Help
Those who qualify for Supplemental Security Income might also be able to apply for Medicaid to help pay for the cost of nursing home care. Medicaid is a program for qualifying low-income Americans. It’s funded by federal and state funds, administered by states, and provides healthcare to around 83 million adults and children in the U.S.
For individuals that meet certain requirements, Medicaid could pay for the full cost of nursing home care. However, there are a few caveats. Your income needs to be lower than $2,563 in most states, and income is counted from the following sources:
The need for care is also determined by each state, and there are often waiting lists for long-term care facilities. Plus, if you do qualify for Medicaid nursing home care, you’ll be required to use most of your monthly income to cover the cost of the room and services.
Still, Medicaid could provide essential financial assistance for qualifying individuals in need of nursing home care and without alternatives. Your Medicaid coverage will provide a daily rate to help cover the cost of a shared room, nursing care, rehabilitation services, meals, medications, and personal hygiene items. But you’ll likely need to pay out-of-pocket for things like a private room, extra meals, comfort items, electronics, phone and internet access, and more.
To get access to Medicaid and its nursing home benefits, you’ll need to apply and meet the program’s eligibility criteria. However, the income threshold is fairly low, so if you have assets like a retirement account, a pension, or an emergency fund, you might not qualify for benefits.
Bottom Line
While your Social Security check can help cover a portion of the cost of nursing home care, it won’t cover the entire cost. Nor will Social Security and Supplemental Security Income combined pay for the full cost of care. But those who qualify for Supplemental Security Income could potentially qualify for Medicaid as well. Nursing home care may be covered by Medicaid in certain cases, but there are some important things to be aware of if you’ll be relying on this program for assistance.
Retirement Tips
-
A financial advisor can help you create a financial plan for your nursing home costs. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
-
Like other types of life insurance, long-term care insurance is typically more affordable the younger and healthier you are when you buy it. SmartAsset’s life insurance guide can help you estimate how much you’ll need and provide quotes.
Photo credit: ©iStock.com/ljubaphoto, ©iStock.com/FatCamera, ©iStock.com/FatCamera
The post How to Pay for Nursing Home Care With Social Security appeared first on SmartAsset Blog.
Source: finance.yahoo.com