In a previous post titled Long Term Care: What Does Medicare Actually Cover?, I outlined the potential out-of-pocket expenses a person may face when receiving care in a private-pay skilled nursing facility (SNF) versus a Medicare-certified SNF.
In short, Medicare Part A will pay for medically necessary skilled nursing care for a limited time and amount if certain requirements are met and the facility is Medicare-certified. After those limits are reached, the recipient is responsible for 100 percent of the cost. The national average daily cost for skilled nursing care in a semi-private room is roughly $235; private rooms typically cost more.
Not all skilled nursing facilities accept Medicare. Often called “private-pay” providers, these facilities do not participate in Medicare and require residents to pay out-of-pocket for services from day one.
To illustrate the financial exposure, a person in a private-pay skilled nursing facility could pay about $10,000 more for the first 100 days compared with a Medicare-certified facility. (That estimate applies to a single benefit period; benefit periods can reset if someone leaves skilled nursing care for a period and then returns, so totals can vary.)
>> Related: What is a Medicare-Certified Senior Care Center?
Paying for skilled nursing care at a CCRC
Prospective residents of continuing care retirement communities (CCRCs), also called life plan communities, frequently ask how Medicare coverage applies to on-site healthcare centers and the services provided there.
CCRCs give residents priority access to a full continuum of care, including skilled nursing within the community’s healthcare center. Entry requires that residents be able to live independently at the start, and the contract guarantees priority access to higher levels of care if they are needed later. CCRCs are attractive to people who want to remain active now while ensuring convenient access to care in the future.
>> Related: What is a “Continuum of Care”?
The way Medicare applies to care in a CCRC follows the same rules described in my earlier post. Medicare does not cover services for residents who are living independently or receiving assisted living, unless those services involve doctor visits or a qualifying hospital stay. If a resident receives skilled nursing care in the on-site healthcare center and the center is Medicare-certified, Medicare may reimburse those services according to its criteria. If the CCRC’s healthcare center is not Medicare-certified, the resident is responsible for the full cost of care from day one, subject to the terms of their CCRC contract.
The cost impact of your CCRC contract choice
CCRCs offer different residency contract models that affect how much residents pay for care when it is needed. One common option is an all-inclusive “lifecare” contract. Under a lifecare agreement, a resident who needs skilled nursing care generally continues paying the same monthly fee as before entering care. In such cases, Medicare would pay any applicable reimbursements to the CCRC while the resident continues to pay the original monthly rate. After Medicare reimbursement ends, the CCRC typically covers the difference between the actual cost of care and the resident’s monthly fee.
Another common arrangement is a fee-for-service contract. With this model, the resident’s monthly fee increases when care is required. Some CCRCs offer a modified fee-for-service approach that raises fees when care is needed but provides discounts or a limited number of days at no extra charge. For example, a resident might receive a set number of days in the healthcare center without additional fees, or pay a reduced rate for care. Under fee-for-service structures, Medicare reimbursements can offset a portion of the increased costs for up to 100 days, following the guidelines described in my previous post.
>> Related: Learn more about CCRC contracts
Understanding the cost of your care
There is a clear cost difference between receiving skilled nursing services from a Medicare-certified provider and from a private-pay facility. Over multiple years that difference may become smaller relative to overall long-term costs, but it remains important to know whether the healthcare center in a CCRC you are considering is Medicare-certified. That knowledge helps you choose the contract and community that best fit your financial and care expectations.