Before Medicaid came on the scene in 1965, everyone paid out of pocket for long-term care (LTC). Operators received a market rate for the services they provided. There was no special rate below the cost of care for public welfare recipients. Nor was there a special, higher private-pay rate to shift uncompensated costs to private payers. Those were the days!
Then came Medicaid. After five years, in 1970, out-of-pocket nursing home expenditures (call them OOPs) had fallen to less than half (49.2%) of total annual spending. By 2000, OOPs were under a third (31.6%) and by 2011, they were only a hair over one-quarter (25.3%). OOPs have since rebounded all the way to 26.1% as of the latest 2023 National Health Expenditure (NHE) data.
Who pays for nursing home care when private payers don’t? In 2023, Medicaid picked up 30.4% of the cost; Medicare covered 20.8%; private health insurance, 9.8%; other health insurance programs, 3.55; and other third party payers, 9.4%. So, third-party payers covered 73.9%. That’s almost three-fourths of total annual nursing home costs for which private payers were not personally at risk.
The full article can be found in McKnight’s Long-Term Care News.
