Does Medicare Pay for Long-Term Care Services?

Long-term care services address various personal and health needs for individuals unable to perform daily activities independently. Many people wonder if Medicare covers these services. Understanding Medicare’s specific coverage rules is important for financial planning and addressing future care needs.

Understanding Long-Term Care Services

Long-term care encompasses a broad range of services designed to meet medical and non-medical needs over an extended period. These services assist individuals with chronic illnesses or disabilities who require ongoing support.

Long-term care distinguishes between “skilled care” and “custodial care.” Skilled care is medically necessary treatment provided or supervised by licensed medical professionals, such as nurses or therapists. It involves services like wound care or physical therapy, typically for a limited time to help a patient recover. Custodial care is non-medical assistance with routine daily activities, including bathing, dressing, and eating. It can be provided by non-licensed caregivers and is often ongoing, focusing on maintaining independence.

Long-term care services can be provided in various settings, including an individual’s home, assisted living facilities, adult day care centers, or nursing homes. Assisted living facilities offer housing, meals, and help with daily activities, while nursing homes provide round-the-clock skilled nursing care.

Medicare’s Coverage for Care Services

Medicare has limitations on covering long-term care, particularly custodial care. While it covers medically necessary services, it does not pay for non-medical custodial care if that is the only care needed. Services assisting with daily activities like dressing or bathing, when provided in isolation, are not covered.

Medicare Part A covers certain short-term stays in a skilled nursing facility (SNF) under specific conditions. An individual must have had a qualifying hospital stay of at least three consecutive days as an inpatient. Admission to a Medicare-certified SNF must occur within 30 days of hospital discharge for a related condition, requiring daily skilled nursing or rehabilitation services. Medicare covers 100% of the cost for the first 20 days. For days 21 through 100, a daily copayment applies, with Medicare covering the remainder, after which Medicare stops paying.

Medicare also covers home health care. To qualify, an individual must be homebound, require intermittent skilled nursing care or therapy services, and have a doctor’s order. Medicare Part A or Part B covers these services, but it does not cover 24-hour at-home care, meal delivery, or personal care if it is the only care needed.

Medicare Part A covers hospice care for individuals diagnosed with a terminal illness with a prognosis of six months or less to live, provided they choose comfort care over curative treatment. This includes nursing care, medical equipment, medications for symptom management, and hospice aide services. While hospice care can be provided in various settings, Medicare does not cover room and board costs if hospice care is received in a private home, nursing home, or assisted living facility, unless short-term inpatient or respite care is arranged by the hospice team. Services like assisted living, adult day care, and most personal care services are not covered by Medicare because they are not considered medically necessary. Some Medicare Advantage plans, however, may offer additional benefits that include adult day care or limited caregiving support.

Other Funding Options for Long-Term Care

Given Medicare’s limited coverage for long-term care, exploring alternative funding sources becomes necessary for many individuals. Medicaid, a joint federal and state program, provides health coverage for low-income individuals. It is the largest payer for long-term care services in the United States, including nursing home care and home and community-based services. Eligibility for Medicaid long-term care is needs-based, considering income, assets, and functional need for care. Asset limits for individuals are around $2,000 in most states, though specific rules vary by state and marital status.

Long-term care insurance is a private policy designed to cover the costs of long-term care services, including assistance with daily living activities in various settings. These policies have a daily or monthly benefit cap and a lifetime maximum. Most policies require a waiting period, or “elimination period,” before benefits begin, ranging from 30 to 90 days, during which the individual pays for care out-of-pocket. Premiums for long-term care insurance can be substantial and are more expensive the older one gets.

Personal savings and assets are another way to fund long-term care. Individuals may use their own funds, investments, or proceeds from selling a home to cover expenses. This option offers flexibility and control over care decisions, but it requires substantial financial resources. Many individuals self-fund until their resources are depleted, at which point they might become eligible for Medicaid.

Veterans benefits can also provide financial assistance for long-term care for eligible veterans and their spouses. Programs like the Aid and Attendance benefit, provided by the Department of Veterans Affairs (VA), offer monthly pension benefits that can help cover the costs of assisted living, in-home care, or nursing home care. Eligibility depends on service requirements, income, and the need for assistance with daily activities. Some hybrid policies combine long-term care coverage with life insurance or annuities. These policies can provide a death benefit if long-term care is not needed, or allow access to a portion of the policy’s value for long-term care expenses.