About Nursing Homes

Nursing homes act as a cost-effective way to enable patients with injuries, acute illnesses or postoperative care needs to recover in an environment outside a hospital.

Nursing homes also serve a second purpose in caring for residents who have chronic illnesses and long-term care needs. These people will probably never return home and may die in the nursing home, in a hospital or in hospice.

About 91% of all nursing home residents are age 65 and older, and 98% of these people use Medicare as their primary insurance. So any change in the way Medicare handles long-term care costs will affect the utilization of nursing homes. The Balanced Budget Act of 1996 and Medicare's subsequent implementation of The Prospective Payment System, has shortened hospital stays and as a result, more and more elderly patients are spending time in a nursing facility before they are well enough to go home.

Many elderly care recipients, for whom Medicare is not an option, are in a nursing home because they don't have money to pay for other types of care. These people are receiving care, paid in-part or fully by Medicaid, or they are spending their assets in order to qualify for Medicaid. . . .(14 pages printed)

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