Does Medicare Cover Long-Term Care?

Long-term care is a collection of services that assist people who need help performing activities of daily living, such as walking, eating or bathing.

While care is most often administered at home by unpaid family members, long-term care can also include extended stays in nursing homes and assisted living facilities.

Medicare does not pay for most long-term care.

For example, Medicare will only help pay for a short stay in a skilled nursing facility following a hospitalization. You must be admitted to a Medicare-certified nursing facility within 30 days of your inpatient hospital stay.

Medicare may also cover costs if you require short-term skilled nursing services, such as physical therapy or speech therapy.

If you meet all conditions and requirements, Original Medicare will pay 100% of the costs in a skilled nursing facility for 20 days and some costs for 80 days after that.

After 100 days, Medicare will not pay any skilled nursing facility costs.

Many Medicare beneficiaries are unaware of the program’s narrow long-term care coverage.

According to 2019 research from the Bankers Life Center for a Secure Retirement, 56% of middle-income baby boomers falsely believe that Medicare will pay for ongoing long-term care.

In 2003, the U.S. Centers for Medicare and Medicaid Services created the position of the Medicare Beneficiary Ombudsman (MBO). This Medicare Ombudsman’s job is to work on behalf of Medicare beneficiaries, helping them find the information they need and helping resolve complaints and grievances.

Medicare beneficiaries have clear and defined rights that cannot be infringed upon. If you believe your rights have been ignored, including situations where you were denied Medicare-covered care or given misleading or inaccurate information about your care or coverage, the MBO may be able to help.

It’s important to know that Medicare does not cover long-term care, even though many beneficiaries do not realize this is the case. If you were inaccurately told that Medicare would cover your long-term care, your rights may have been infringed upon. Your Medicare rights may also have been infringed upon if you were poorly treated or discriminated against.

While the MBO is available to help all beneficiaries, ombudsmen are also available to help specifically with the issues that those receiving long-term care and living in nursing homes face.

According to the Administration for Community Living, each state employs Long-Term Care (LTC) Ombudsmen. These LTC Ombudsmen can help you deal with any issues you are facing when living in a long-term care facility and investigate potential problems that are affecting your safety or your health.

Long-term care may be your costliest expense in retirement.

According to Genworth Financial, a semi-private room at a nursing home averaged $8,145 a month, or $97,747 a year in 2022. A private room ran roughly $111,657 a year.

Several factors influence cost, including location, length of stay and insurance.

Because Medicare long-term care coverage is extremely limited, patients and families must often look elsewhere to find ways to pay for these services.

Medicaid, the federal and state health insurance program for low-income people, pays a bulk of the nation’s nursing home bills.

However, using Medicaid to cover long-term care is often seen as a last resort because applicants must have minimal assets and limited incomes to qualify.

This forces many older Americans to spend nearly everything they have in order to qualify for Medicaid.

Insurance is one way to protect against the financial drain of long-term care expenses.

Long-term care insurance has been around for years, but many people are hesitant to purchase a policy because they worry their investment will be wasted if they do not use it.

Several insurance companies now offer options to address this concern by combining life insurance with long-term care insurance.

These hybrid or combination policies pay long-term care costs if you need services when you’re alive but convert funds to life insurance money for your beneficiaries when you die.

Purchasing an annuity is another way to fund long-term care costs.

Annuities are contracts with insurance companies that promise to pay you money for a specific number of years — or for the rest of your life.

For example, you can buy a deferred annuity with payouts scheduled to begin in 20 years and earmarked for long-term care.

You may also be able to purchase a long-term care rider, which offers the benefits of higher annuity payouts if you need long-term care in the future.

Finally, a reverse mortgage is another common way to finance long-term care. Reverse mortgages are a specific type of home loan that allow you, the mortgage holder, to receive cash against the value of your house without selling it.

Reverse mortgages are complex and tend to be more expensive than other types of home loans. An approved reverse mortgage counselor or Certified Financial Planner™ can discuss these important considerations with you and your family.