Share of Cost
Depending on how much income they have, people in nursing homes and even some receiving home and community-based services may have to pay part of the cost of the care they receive themselves. This is known as share of cost, or by the more complicated name of post-eligibility treatment of income. To keep this as simple as possible we will use the term “share of cost”.
There are two reasons why you may be required to pay for part of the cost of your care.
One is that when you are in a nursing home, almost everything you need is provided for you. In addition to medical care you receive food and shelter, and if you are eligible for Medicaid the program pays for that through its reimbursement to the nursing home. In other words, you have very little in the way of living expenses because Medicaid is paying for everything in the nursing home.
The second reason is that in most states a person with high income can still be eligible for Medicaid if the person is in a nursing home. As we explain in the section on the special income level group, the income limit for that group can be as high as $2,130 a month in 2013. If you are living in the community you must spend much of your income on things like shelter, food, and utilities. But, if you are in a nursing home, you do not have to pay for these things because the nursing home provides them and they are paid for by Medicaid. This means that if you are in a nursing home and have high income, you may have “extra” income that you are not using for anything.
Medicaid deals with this extra income by requiring you to help pay for part of the cost of your care in the nursing home. The state determines how much extra income you have by starting with your total income and then deducting certain items and expenses. Some things that are deducted are a small allowance for personal needs, an amount to take care of the needs of a spouse or children who may still be living at home, and an allowance to maintain your home if you have one. Whatever is left after all of the deductions is considered to be extra income, and that is your share of cost, or the amount you are expected to pay for your care. If nothing is left after all of the deductions, you do not have any share of cost.
The state takes your share of cost into account when it pays the nursing home. It does this by subtracting your share of cost from the nursing home payment. For example, if your share of cost is $300, the state reduces its payment to the nursing home by that amount. The nursing home will then ask you or your family for payment of your $300 share of cost.
Share of cost can also apply if you have high income and receive home and community-based services. But, instead of a small allowance for personal needs, you would have a much larger maintenance needs allowance. That is because a person receiving home and community-based services has the same expenses as anyone else living in the community. A number of states do not require people receiving home and community-based services to pay any share of cost. Instead, they allow those people to keep all of their income to pay for their living expenses in the community.