It's Your Money: Nursing home costs
Posted at: 02/06/2013 6:00 PM
| Updated at: 02/06/2013 6:14 PM
By: Ray Levato | WHEC.com
Are you familiar with the so called granny tax? It shows up on the bills of people who pay for their own nursing home care. The tax amounts to 6% and is assessed statewide. The granny tax brings in $600 million for the state. Governor Cuomo's new budget calls for extending the tax for the budget year that begins April 1.
Most people save money throughout their lives for their golden years.
But when you get there, will your savings be eaten up by the cost of a nursing home? And when you get the bill, the state of New York adds a tax to boot.
St. John's Home has taken a stand against extending the granny tax.
Duane Girdner, St. John's Home, said, “We have opposed the granny tax since its inception in 2002, and the reason is because it taxes the very people who are already paying their fair share.”
And usually, it's a son or daughter who's handling their mom or dad's finances at that point and it comes as a shock.
Girdner said, “Essentially the tax would be anywhere from $25 to $27 a day depending on how much the daily rate will be. That doesn't sound like a lot. But you take that times 365 days and that can be $9,000 to $10,000.”
Nursing homes in our area can cost well over $100,000 a year if you pay privately out of your own pocket. On top of that, the state tax on private pay individuals is six percent.
So taking a round number of $100,000 a year, the state's granny tax adds another $6,000 onto the bill.
Senator Joe Robach is fighting against keeping the granny tax in the state budget.
Senator Joe Robach, (R) 56th senate district, said, “So here we are, people who saved their money and took personal responsibility have to pay a six percent surcharge on the average cost of about $100,000 in the state to take care of their loved one or pay for themselves, that seems like a bad way to get revenue to so we're saying let's not re-up that tax and that surcharge.”
Jennifer Meagher, senior life advocate, said, “Many private pay folks out there are aware that they are who's funding the nursing home. And so to be taxed on top of sort of footing the bill to begin with feels like an other hit. And we will all learn when we reach our 80's that it's tough out there.”
Meagher says that's like rubbing salt in the wound.
Meagher said, “These are people who went through the world wars, the civil rights era, they went through the they pulled this country through a lot of things. Let's not tax them, for heaven's sakes."
Nursing homes set their own private payor rates. The 6% surcharge is part of the New York State Health Care Reform Act.