What Happens if Medicare Stops Paying for Nursing Home Care?

Medicare plays a crucial role in providing healthcare coverage for millions of elderly and disabled Americans. While it does not typically cover long-term nursing home care, it does pay for short-term stays in skilled nursing facilities (SNFs) under specific conditions. If Medicare were to stop paying for nursing home care entirely, the financial and social impact on seniors, their families, and the broader healthcare system would be profound.

This blog explores the potential consequences of such a policy shift, including the financial burden on families, increased strain on Medicaid, and a potential rise in home-based care alternatives.

Understanding Medicare’s Coverage of Nursing Home Care

Medicare currently covers nursing home care under limited conditions. According to the Centers for Medicare & Medicaid Services (CMS), Medicare Part A covers up to 100 days of skilled nursing facility (SNF) care after a qualifying hospital stay of at least three days. The breakdown is as follows:

• Days 1-20: Fully covered by Medicare
• Days 21-100: Patient pays a copayment ($204 per day in 2024, per CMS)
• Days 101+: No Medicare coverage; patients must rely on other means such as Medicaid or private pay

In contrast, long-term custodial care, also known as nursing home care, which includes assistance with daily activities such as bathing, dressing, and eating, is not covered by Medicare. Instead, Medicaid, private insurance, or out-of-pocket payments typically fund such care.

The Financial Impact on Seniors and Families

If Medicare were to cease its SNF coverage entirely, patients and their families would face substantial financial burdens. According to Genworth’s 2023 Cost of Care Survey, the average cost of a private room in a nursing home is $9,584 per month ($115,008 annually). Even a semi-private room costs an average of $8,669 per month ($104,028 annually).

Without Medicare’s partial assistance for short-term stays, families would need to cover these expenses entirely or find alternative care solutions. For many seniors, this would be financially devastating. A 2023 study from the National Council on Aging found that over 50% of seniors have savings of less than $75,000—far from enough to afford even a year of nursing home care.

Increased Strain on Medicaid

Many seniors unable to afford nursing home care turn to Medicaid, the largest payer for long-term care services in the United States. Medicaid eligibility requires individuals to spend down most of their assets, leaving them financially vulnerable.

If Medicare stopped covering short-term skilled nursing care, more seniors would deplete their savings faster, leading to increased Medicaid enrollment. According to the Kaiser Family Foundation, Medicaid currently covers 62% of nursing home residents. If more people had to rely on Medicaid, states could face severe budgetary challenges, potentially leading to reduced benefits or eligibility restrictions.

Potential Rise in Home-Based Care

If Medicare coverage for nursing home care were eliminated, families might seek more affordable alternatives such as home-based care. While home healthcare is often a preferred option, it comes with its own financial and logistical challenges.

According to Genworth’s survey, the median cost of a home health aide is $5,720 per month—lower than nursing home care but still costly. Additionally, many seniors require 24/7 care, making home care financially impractical for many families.

Another challenge is the shortage of home healthcare workers. The U.S. Bureau of Labor Statistics projects that the demand for home health aides will grow by 22% from 2022 to 2032, far outpacing the available workforce.

Increased Hospital Readmissions and Emergency Room Visits

Without Medicare’s support for post-hospitalization nursing home care, hospitals may experience increased readmissions. For example, a 2020 study published in JAMA Internal Medicine found that patients discharged to SNFs had a 36% lower hospital readmission rate compared to those sent home with no skilled nursing care.

If patients cannot access nursing home care, they may be discharged prematurely or lack proper rehabilitation, leading to more emergency room visits and longer hospital stays. This would strain hospitals financially and contribute to overcrowding in emergency departments, potentially leading to hospital mistakes and medical malpractice.

Impact on Nursing Homes and the Healthcare Industry

If Medicare were to eliminate funding for nursing home care, many facilities might struggle to remain financially viable. The American Health Care Association estimates that more than 1,600 nursing homes closed between 2020 and 2023 due to financial pressures exacerbated by the COVID-19 pandemic.

Losing Medicare reimbursements could push more facilities to closure, reducing access to care for seniors, especially in rural areas where alternative options are limited.

Potential Policy Alternatives and Solutions for Nursing Home Care

If Medicare stops covering nursing home care, policymakers might consider alternative approaches to support seniors, such as:

1. Expanding Medicaid Eligibility: Increasing income and asset limits for Medicaid long-term care coverage.
2. Strengthening Home and Community-Based Services: Encouraging alternatives like adult day care, in-home therapy, and respite care.
3. Encouraging Private Long-Term Care Insurance: Incentivizing younger individuals to purchase long-term care insurance through tax benefits.
4. Creating a Public Long-Term Care Insurance Program: Some countries, like Japan and Germany, have implemented national long-term care insurance programs to address similar issues.

Contact the Award-Winning Illinois Nursing Home Abuse and Neglect Lawyers at John J. Malm & Associates

If Medicare were to stop paying for nursing home care, the effects would be severe and widespread. Seniors and their families would face immense financial strain, Medicaid would experience increased pressure, and the healthcare system could suffer from more hospital readmissions and nursing home closures.

If you or a loved one suffered nursing home neglect, contact John J. Malm & Associates for a free consultation. Our top-rated Illinois elder abuse attorneys help nursing home residents who have suffered injuries due to abuse or neglect. We are ready to fight for you and help you get the compensation you deserve.