November 17, 2022

Spouse in Nursing Home Raises Poverty Risk

When nursing home care uses up a widow’s savings, the federal Medicaid program will kick in and cover her bills for care. But it’s more complicated for couples.

If one spouse moves into a nursing home and the bills start piling up, the person who is still living in their home can face serious financial hardship and even poverty.

This is a significant risk facing the one in three married people in their early 70s whose spouse will eventually wind up in a nursing home, researchers at RAND found in a study on the financial impact on couples rather than individuals.

It’s not unusual to pay roughly $90,000 for a year for a semi-private in a nursing home, though many people have relatively short stays. A common misconception about Medicare is that it covers all nursing home bills. It does not. The program pays for just 100 days of care in a skilled nursing facility and only after someone has been in the hospital and needs more time for recovery or rehabilitation.

High-income retirees pay directly for care that doesn’t follow a hospital stay, because in most states Medicaid kicks in only after couples deplete all but about $3,000 in savings to cover the cost of the nursing home. There is one significant protection for couples under Medicaid’s eligibility rules: their home does not count as an asset as long as a spouse continues to live there.

But if an unlucky couple has high out-of-pocket spending due to a long stay in a nursing home, the researchers found that it increases the chances they will run through virtually all of their savings and become impoverished. While poverty is far less likely for higher-income couples, they are not immune. …Learn More