The families of nursing home residents moving from private pay to MassHealth coverage in nursing homes often ask whether they should maintain their Medicare supplemental insurance policies. We generally tell them that it’s up to them because it makes not financial difference.
This is because the premiums for maintaining the insurance are deductible from the amount nursing home residents must pay the facility each month. Under the MassHealth rules, eligible nursing home residents must pay their income to the facility, less certain deductions, which include a $72.80 a month personal needs allowance (very generous), in some instances an allowance for a healthy spouse living at home, and medical expenses, including health insurance premiums. So, in most instances, the income will go either to the nursing home or to the insurance company.
Since MassHealth covers the Medicare co-payments and deductibles covered by Medicare supplemental policies, such as Blue Cross/Blue Shield’s Medex, there is no financial difference for the nursing home resident between keeping or dropping the policies, there could be a difference in terms of care.
This is because there’s a significant difference to the medical providers since MassHealth doesn’t actually pay the full Medicare co-payment. As a result, doctors visiting patients in nursing homes do not receive full payment for their visits with MassHealth-covered residents unless they have supplemental insurance.
Since, under Medicare’s reimbursement system, these doctors are underpaid as it is when compared to their brethren practicing surgery and other procedure-based specialties, nursing home residents can at least help them receive their full Medicare payment by maintaining their supplemental insurance policies.