Does Medicare Cover Long-Term Care?
Medicare does not cover the cost of long-term care, also known as custodial care. This includes extended stays at nursing homes and assisted living facilities. Medicare may cover some costs at these facilities for 100 days following hospitalization.
- Written by Rachel Christian
Financial Writer and Certified Educator in Personal Finance
Rachel Christian is a writer and researcher for RetireGuide. She covers annuities, Medicare, life insurance and other important retirement topics. Rachel is a member of the Association for Financial Counseling & Planning Education.Read More
- Edited ByMatt Mauney
Matt Mauney is an award-winning journalist, editor, writer and content strategist with more than 15 years of professional experience working for nationally recognized newspapers and digital brands. He has contributed content for ChicagoTribune.com, LATimes.com, The Hill and the American Cancer Society, and he was part of the Orlando Sentinel digital staff that was named a Pulitzer Prize finalist in 2017.Read More
- Published: June 22, 2020
- Updated: September 19, 2022
- 4 min read time
- This page features 10 Cited Research Articles
- Edited By
Medicare Long-Term Care Coverage
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 at 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 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.
Alternatives to Medicare for Long-Term Care
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.
- Veterans Affairs’ benefits
- Personal savings
- Long-term care insurance
- Reverse mortgages
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.
How to Pay for Long-Term Care
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.
10 Cited Research Articles
- Genworth Financial. (2022). Cost of Care Survey. Retrieved from https://www.genworth.com/aging-and-you/finances/cost-of-care.html
- Omdahl, D. (2020, January 14). Does Medicare Pay For Long-Term Care? Don’t Make A Big Mistake! Retrieved from https://www.forbes.com/sites/dianeomdahl/2020/01/14/does-medicare-pay-for-long-term-care-dont-make-a-big-mistake/
- Bankers Life. (2019, March 12). Bankers Life Study: Boomers are More Prepared for Death Than Life - And It's Not Getting Better. Retrieved from https://www.bankerslife.com/about-us/news/press-releases/2019/bankers-life-study-boomers-are-more-prepared-for-death-than-life-and-its-not-getting-better/
- Genworth Financial. (2019). Costs of Care Trends & Insights. Retrieved from https://www.genworth.com/aging-and-you/finances/cost-of-care/cost-of-care-trends-and-insights.html
- U.S. Department of Health & Human Services. (2017, November 14). Medicare and Long-Term Care Information. Retrieved from https://acl.gov/ltc/medicare-medicaid-and-more
- U.S. Department of Health & Human Services. (2017, October 10). How Much Care Will You Need? Retrieved from https://acl.gov/ltc/basic-needs/how-much-care-will-you-need
- AARP. (n.d.). Does Medicare Pay for Nursing Homes? Retrieved from https://www.aarp.org/health/medicare-qa-tool/current-long-term-nursing-home-coverage/
- Medicare.gov. (n.d.). Long-term care. Retrieved from https://www.medicare.gov/coverage/long-term-care
- U.S. Department of Health & Human Services. (n.d.). Buying Long-term Care Insurance. Retrieved from https://acl.gov/ltc/costs-and-who-pays/who-pays-long-term-care/buying-long-term-care-insurance
- U.S. Department of Health & Human Services. (n.d.). Cost of Care. Retrieved from https://acl.gov/ltc/costs-and-who-pays/costs-of-care
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