Medicare is the primary medical insurance for most Americans ages 65 and over. But does Medicare cover the expensive costs of long-term care?
The possibility of needing long-term care, and having to pay for that care, is one of the great fears of older Americans. Understanding exactly which long-term care costs Medicare will cover, and won’t cover, is important to developing a plan to pay for any long-term care costs.
Defining Long-Term Care
Long-term care is the provision of personal services and medical care to someone who is cognitively impaired or can’t perform two or more of the six activities of daily living (ADLs). The ADLs are dressing, bathing, eating, walking, toileting, and transferring (such as moving from a bed to a chair without help). Despite the name, some people need long-term care relatively briefly, such as when they are recovering from surgery or an accident. Others need the care for months or years, such as when they have chronic disabilities or illnesses or are declining due to age.
Long-term care services include:
What Long-Term Care Services Does Medicare Cover?
Unfortunately, Medicare covers few long-term care costs. Most long-term care services are known as custodial care, which is non-medical care that helps individuals with the ADLs. Medicare is designed to help individuals with medical expenses, primarily those associated with hospitalization. Most long-term care services are not covered.
Medicare will cover long-term care for short stays in a skilled nursing facility when the beneficiary meets the following requirements:
If these conditions are met, Medicare will pay 100% of the cost of the first 20 days of LTC. After the 20th day, the beneficiary pays a daily copayment of $170.50 per day until the 100th day. (The copayment amount changes each year with medical cost inflation.) After 100 days, the beneficiary pays 100% of the cost of additional LTC.
Medicare also covers some short-term skilled nursing care received at home. When a doctor prescribes medical care at home, Medicare will cover the cost of any nurses or therapists. Coverage generally is limited to 28 hours per week unless the doctor specifies that the individual needs more attention.
Medicare also covers hospice care costs. Hospice care provides comfort care to people with terminal illnesses. Medicare will cover hospice costs if the person has less than six months left to live, or a doctor certifies them as terminally ill.
Alternative Ways to Pay for Long-Term Care
Since Medicare doesn’t pay for the large majority of long-term care costs, there must be some alternative ways to pay for long-term care. These ways include:
The Bottom Line
Those expecting Medicare to cover all of their LTC expenses need to re-evaluate how they will pay for long-term care should the need ever arise. Medicare is unlikely to pay for their LTC. There are multiple ways to pay for long-term care. An individual should compare all the options and develop a plan to pay for LTC. Many people will find that relying on a combination of private pay and an insurance policy will meet their needs.
Valuable assistance for this summary of “Does Medicare Cover Long-Term Care?” was provided by Bob Carlson, editor of the Retirement Watch advisory service and chairman of the Board of Trustees of Virginia’s Fairfax County Employees’ Retirement System with more than $4 billion in assets.
Jaxon Kim is an editorial intern with Eagle Financial Publications.