Who Pays the Bills when Medicare Runs Out?

By: Nick Leydorf
No one planned that Mom or Dad would have to end up long term in a nursing home and they can’t afford the cost after Medicare payments run out.

Many families will face the reality that at some point an aging family member must go to a nursing home, also called “rehab”. They provide things assisted living homes aren’t licensed to give, such as skilled care. For instance, an aging parent has surgery and needs therapy during the recovery period. They’re sent from the hospital to a nursing home where therapy is offered, explains Forbes’ recent article entitled “Paying For Nursing Homes: Beware Of Illegal Debt Collection Practices.”

The cost of a long-term nursing home stay, beyond the allowable maximum under Medicare of 100 days, is usually a surprise. According to the annual Genworth cost of care study, and adjusting for inflation, in 2021, the annual median cost of a single room in a nursing home was $108,405.

The CFPB analyzed the risks to family caregivers and friends who enter into contracts for a loved one’s admission to a nursing home. Although it’s illegal, some nursing homes continue the practice of making admission of the senior dependent on the caregiver or other signing a contract making the caregiver the “responsible party”. It forces the family with the immediate need of placing the loved one into the home to sign whatever it takes to get them admitted.

After that, the nursing home can go after the signer to collect the debt for payment after the elder’s Medicare runs out, or the elder’s own funds are depleted. Some residents have run of out funds and have applied for Medicaid. However, processing those applications can take months. All the while, the debt grows for essential care. Some of these nursing homes send the bills to collection agencies, report the unpaid debts to credit reporting agencies and even file lawsuits against the unwitting signatories on those coerced admission contracts. The nursing home’s initial contract and their debt collection practices are illegal under federal law.

If your loved one must go to a nursing home or “rehab facility”, never sign anything that indicates you’re the legal representative or responsible party. Don’t submit to pressure tactics, if someone wants to force you to sign such a contract. If you encounter these tactics, tell them that it’s illegal under the Federal Nursing Home Reform Act.

Do your research before your loved one must enter such a home for any reason. You may not have much notice but ask to see their admission contract ahead of time. If you see these types of clauses in it about being responsible for the resident’s bills, look elsewhere.

Finally, seek the advice of an elder law attorney for any nursing home or other care contract you don’t understand. These contracts can be full of pitfalls, and the unsuspecting can be caught up in an illegally created trap. An elder law attorney can help you through your decision-making process.

Reference: Forbes (Sep. 13, 2022) “Paying For Nursing Homes: Beware Of Illegal Debt Collection Practices”

Suggested Key Terms: Elder Law Attorney, Medicaid, Paying for a Nursing Home, Nursing Home Care

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