Lifetime patterns of payment for nursing home care.

Although much is known about who pays the annual aggregate nursing home bill, relatively little is known about payment-source patterns of individuals during their lifetimes. In this article, lifetime payment-source patterns are analyzed for elderly nursing home users, particularly the extent to which they spend down assets to become eligible for Medicaid. During their lifetimes, 44% of persons who use nursing homes after 65 years of age start and end as private payers, 27% start and end as recipients of Medicaid benefits, and 14% spend down assets to become eligible for Medicaid benefits. Although still a relatively small proportion, the asset spend-down estimate based on lifetime data is 2.5 times previous national estimates based on data for single nursing home stays. The projected risk of spending down assets in nursing homes for all persons who turn 65 years of age in 1995, including users and nonusers of nursing homes, is slightly more than 6%. Equally or more important for policy is that 17% of all persons who turn 65 years of age can expect to end up using a nursing home and receiving Medicaid reimbursement. Of those, more than 3 in 5 will have entered the nursing home already eligible for Medicaid benefits.