Trends in Nursing Home Expenses, 1987 and 1996

This article presents data about expenses and sources of payment for nursing homes for 1987 and 1996. A central finding is that the role of Medicare in financing nursing home care has greatly expanded. Medicare payments represent 2 and 19 percent of the total for 1987 and 1996, respectively. As Medicare's role increased, there was an accompanying decline in the proportion of expenses paid out of pocket. In 1987, 45 percent was paid out of pocket versus 30 percent in 1996. Those nursing home residents using Medicare most heavily as a source of payment tended to exhibit very short stays (33 days on average), zero limitations in activities of daily living (ADLs), and no mental conditions.