What is a Skilled Nursing Facility?

Navigating the world of health insurance for skilled nursing facilities (SNFs) in California can be overwhelming for families. Whether your loved one is recovering from surgery, needs rehabilitation, or requires long-term care, understanding how different types of insurance work in this setting is essential. In this guide, we’ll break down the key aspects of Medicare, managed care, private insurance, and how primary and secondary coverage function in SNFs.

A skilled nursing facility (SNF) or sometimes referred to as a “nursing home” or “rehabilitation center”, provides short-term or long-term care for individuals who need medical services beyond what can be provided at home or in an assisted living facility. These facilities offer 24-hour nursing care, physical therapy, occupational therapy, speech therapy, and other specialized medical services. The cost of staying in an SNF can be significant, which is why understanding insurance coverage is crucial. Different types of insurance have different rules, coverage limits, and eligibility requirements.

Medicare and Skilled Nursing Facilities

Medicare is the primary insurance for many seniors over 65 and some individuals with disabilities. Medicare covers skilled nursing care, but only under specific conditions.

Medicare Part A: Coverage for Skilled Nursing Facilities

Medicare Part A (hospital insurance) covers short-term stays in a skilled nursing facility, but only if all of the following criteria are met:

• The patient has a qualifying inpatient hospital stay of at least three consecutive days (not counting the day of discharge).
• A doctor certifies that skilled nursing care is medically necessary.
• The patient enters the SNF within 30 days of hospital discharge.
• The care received must be skilled care (such as physical therapy, wound care, IV therapy) rather than custodial care.

Medicare Coverage Period and Costs

Medicare will cover a maximum of 100 days per benefit period in an SNF:

• Days 1-20: Medicare covers 100% of the costs.
• Days 21-100: The patient pays a daily coinsurance ($204 per day in 2024), and Medicare covers the rest.
• After 100 days: Medicare coverage ends, and the patient is responsible for all costs.

Important Notes:

• Medicare does not cover long-term custodial care, such as assistance with bathing, dressing, or eating, unless skilled medical care is required.
• If a patient plateaus or no longer requires skilled care, coverage may end before reaching 100 days.

Medicare Advantage Plans (Managed Care Medicare)

Many beneficiaries are enrolled in Medicare Advantage (Part C) plans, which are private insurance plans that replace Original Medicare. These plans often have different rules, network restrictions, and authorization requirements for SNF coverage.

• Unlike Original Medicare, Medicare Advantage plans may not require a 3-day hospital stay to qualify for SNF coverage.
• Patients usually need prior authorization from their insurance provider before entering a skilled nursing facility.
• Coverage rules, copays, and provider networks vary by plan, so it’s important to check with the insurance company before admission.

Medi-Cal and Skilled Nursing Facilities

For individuals with limited income and assets, Medi-Cal (California’s Medicaid program) can help cover SNF costs. Medi-Cal provides long-term care coverage that Medicare does not.

• If a patient exhausts their Medicare SNF benefits and cannot afford ongoing care, they may qualify for Medi-Cal.
• Unlike Medicare, Medi-Cal covers custodial care in a skilled nursing facility.
• Many SNFs in California accept Medi-Cal, but some may have limited Medi-Cal beds, creating waitlists.

To qualify for Medi-Cal, individuals must meet income and asset limits, though California’s Medi-Cal expansion has eased some restrictions. Many individuals “spend down” their assets or use a Medi-Cal planning strategy to qualify while preserving some wealth.

Private Insurance and Skilled Nursing Care

Some individuals have private health insurance or employer-sponsored insurance that may help cover SNF costs. The extent of coverage varies significantly by policy.

• Commercial health insurance policies typically cover short-term SNF stays after a hospital stay, similar to Medicare.
• Patients often need prior authorization before admission.
• Long-term care insurance may help cover extended SNF stays, particularly for custodial care, but policies differ widely.

Primary vs. Secondary Insurance in Skilled Nursing Facilities

Many patients have more than one type of insurance, such as Medicare plus a Medicare Supplement (Medigap) plan, or Medicare plus Medi-Cal. Here’s how primary and secondary insurance work in SNFs:

• Primary insurance pays first (e.g., Medicare, a Medicare Advantage plan, or private insurance).
• Secondary insurance covers some or all of the remaining costs, depending on the policy.

Common Coverage Scenarios:

1. Medicare + Medigap (Supplemental Insurance)

• Medicare pays its portion of the SNF stay.
• Medigap covers Medicare’s daily coinsurance for days 21-100.
• After 100 days, neither Medicare nor Medigap will pay, and the patient must find alternative coverage.

2. Medicare + Medi-Cal (Dual Eligibility)

• Medicare covers the SNF stay first.
• When Medicare benefits run out, Medi-Cal steps in to cover ongoing care.
• Patients with dual coverage typically pay little to nothing out-of-pocket.

3. Medicare Advantage + Medi-Cal

• The Medicare Advantage plan determines coverage rules and out-of-pocket costs.
• Medi-Cal may cover remaining costs, including room and board if custodial care is needed.

4. Private Insurance + Medicare

• The private insurance plan may provide primary or secondary coverage, depending on the policy.
• If Medicare is primary, the private plan may cover deductibles, copays, or costs not covered by Medicare.

How to Plan for Skilled Nursing Costs

Since insurance coverage varies, it’s important for families to plan ahead:

1. Understand the patient’s insurance coverage—Check Medicare, Medigap, private insurance, and Medi-Cal eligibility.
2. Ask about prior authorization—Many managed care plans require approval before SNF admission.
3. Consider long-term care insurance—This can help cover custodial care costs in the future.
4. Explore Medi-Cal planning—If long-term care is needed, consult with a Medi-Cal specialist to explore eligibility.
5. Communicate with the SNF’s admissions team—They can help verify coverage and explain financial responsibilities.

Conclusion

Skilled nursing facility care in California is covered by a complex mix of Medicare, managed care, private insurance, and Medi-Cal. Families should take the time to understand their loved one’s insurance options to avoid unexpected costs. If you are unsure about coverage, speaking with an SNF financial counselor or insurance specialist can help ensure the best care with the least financial burden.

If you have specific questions about coverage at a SNF, don’t hesitate to reach out to our admissions office for personalized guidance. They can be reached at 714-842-5551